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First National Bank Home

How does a building loan work?

The application will be assessed on receipt of the necessary documentation in line with the policy and lending criteria of the bank. Assuming the bank is in a position to assist, the bank will require the customer to finance 10% of the total package price (land + contract amount) up front, in all instances; this however could increase dependent on the credit profile score of the applicant(s). The 10% requirement is based on the bank’s assessment of the completed value of the property.

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If the customer is granted a loan amount with a shortfall (a loan amount of less than the contract price), the customer will be required to complete building to the value of the shortfall amount upfront from his/her pocket.

Additionally, the bank will require the builder to build a further 10% of the contract price from his/her funds before any funds will be paid out from the Home Loan account. The final quote will have a condition stipulating this requirement and the customer will be advised of the requirement when final customer contact is made.

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You have 12 months to complete the building. Construction work must commence within the first 3 months following registration. Your loan term is limited to 240 months.

Do I need to provide a deposit?

The bank will require the customer to finance 10% of the total package price (land + contract amount) up front, in all instances; this however could increase dependent on the credit profile score of the applicant(s).

The 10% requirement is based on the bank’s assessment of the completed value of the property. If the customer is granted a loan amount with a shortfall (a loan amount of less than the contract price), the customer will be required to complete building to the value of the shortfall amount upfront from his/her pocket.

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Additionally, the bank will require the builder to build a further 10% of the contract price from his/her funds before any funds will be paid out from the Home Loan account. The final quote will have a condition stipulating this requirement and the customer will be advised of the requirement when final customer contact is made.

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