When it comes to building or renovating your home, it’s important to remember that unforeseen costs almost always crop up.
Adrian Goslett, regional director and CEO of RE/MAX, says: “Several aspects could have an effect on the cost of the project, such as delays in the schedule caused by weather or labour strikes. It is not uncommon for a project to cost 20% more than the original estimate. Much like saving for a deposit to purchase an existing home, those who decide to build will need to have some cash set aside.”
If you are considering some building work, one way to finance it would be through a building loan.
This lump sum amount is not paid to you, but is managed by the bank and given to the contractor as required.
A benefit of this is that you don’t pay any interest on the money that has not been handed over.
“The progress of the construction will be assessed by an assessor from the bank, who will determine the amount of the loan that will be paid to the contractor,” Goslett says.