There are two main financing options:
(additional variations of these two choices are available).
The client pays a deposit, with the balance of the total package paid at the completion of your new home. The client is using somebody else’s money to fund the building of their new home. The funding source will charge interest for the use of this funding solution.
The deposit is usually between 10% & 15% with the balance due on ‘Practical Completion’ of the build.
This financing is more expensive than progress payments but can be the only solution or simplest options for the client to fund their building project. Advantages include you can keep renting without having to pay progress payments on top
This type of funding is commonly called a ‘standard building contract’. The client will purchase the land (deposit & settlement of the land) and will make payments to the building company as milestones are reached through out the build of the new home (as set out in the contract).
Progress Payments (Build Only)
With land and build packages, the land will need to be purchased prior to construction starting. This means that settlement on the section occurs early in the process. Generally, the client will need to have their name on the tile for the banks to secure their funding. For the client to get their name on the title, they will have to have settled (paid in full) the section purchase.
Disclaimer: Caesar Homes have tried to make this as simple as possible to enable clients to get a brief overview of financing solutions. Caesar Homes are not financial advisors, and recommend you discuss these options further with your financial advisor.