• Proximity to the local market – a supermarket, fruit and vegetable store, butcher, dairy, restaurants and cafes, boutiques, doctors and medical centers, library, churches, playschool, playgrounds, parks, gyms and swimming pool to name but a few.
• What are the schools like in the area? You may not have children and aren’t planning any, but being ‘in the zone’ for a popular school can add a significant amount of value to your home over time.
• Which part of the property does the sun rise on, which part has sunlight during the day, and at what times of the day? It is recommended that you visit a house that you like a different times of the day to understand how the sun affects each room.
• Is the neighbourhood pleasant to live in? Are the homes, gardens and local facilities well cared for? Is it a safe area? Is it quiet or busy? What are the neighbors like? Is it a well established neighborhood or a newer, developing area?
• What is the zoning in the area and what does it allow? If it is commercial, there may be business or even industrial developments close to your home in the future. This could affect property values in the future.
• How far is the house from your family and friends, or your workplace? How close are the public transport and road access points?

When you are building a new house and need a loan to assist you with the payment for the build, you will need to approach the lender for a Construction Loan. Each lender may have different guidelines when it comes to lending for a build. For instance, some lenders will only lend between 70% to 80% of the value of the finished property, while other lenders may go up to 90%. With a new build you should get a fixed price contract ideally with a master or certified builder as their work will be guaranteed.

Before the mortgage is fully approved you will need to get a Registered Valuation and agree with the builder and the lender at what stages during the build that progress payments will be made. At each stage the bank may ask for an updated “as is” valuation and you will need to stay below the lender’s loan-to-value cap (generally 80%) throughout the build.

Most banks lend against the project cost. Sovereign is a bit different and will let you use an acquisition price that makes allowance for “reserves” and interest capitalization. This along with some other differences around the build management make Sovereign a good choice for these types of mortgages.

At Mortgage Mantra, we have over 10 years experience in helping kiwis get into their first home. We can help you fulfill your dream of building a new house and navigate you through the Construction Loan process.