Rules to Buying the Section

If you need to purchase a section prior to construction, you can secure a land loan for up to 60 months. Your deposit will need to be between 20-25% of the land price, which can be used when you are ready to build. If you are unable to raise this level of deposit, you will be required to have your building contract coincide with the land settlement. In this case NewBuild Plan™ will fund your section, no matter the level of lending required to ensure you own the section before you start building.

Most or all out-of-pocket expenses should be included in the acquisition price.

Settlement on the Section – You must take title of the land to ensure you have legal ownership of the dwelling as it’s being built.

You will need to meet minimum deposit criteria on your section and that depends on the type and location of your section.

Your Deposit

image7Because NewBuild Plan™ allows deposits as low as 5% for house and land, the placement of deposit is critical. With low deposit finance, it is likely that most, if not all, your deposit is paid towards settlement on the section. This may leave your builder with little or no advance payments to begin the project. If you have a larger deposit, some will be applied to meet the section deposit and the rest paid to the builder.

You should not sign your builders’ contract until you receive the NewBuild Plan™ schedule advising how much deposit you can pay your builder, particularly if your deposit is less than 20% of the total project.

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