Once you own a home, several doors open to you. If there’s room on the property, you can build on it. There are some checks that you have to go through, such as securing the proper permits. Next, you need to figure out the financing. Those who plan to finance the construction should be aware of a few things.
A Granny Flat construction loan is highly recommended as a second option. The first option is to leverage home equity accrued on your property. A home equity line of credit provides a more favourable interest rate than a construction loan. If there’s not enough home equity, apply for the construction financing.
Granny Flats are great additions for homeowners who have aging parents, a growing family or are seeking a new revenue stream. There’s a small risk that something could delay the project or prevent the project’s completion.
A construction loan does not live under the same umbrella as mortgages or home equity-based products. You’ll be asked to submit a plan, and the contractor will submit a contract outlining costs, schedule, and plan. The home loan rates differ too.
Once you secure the financing, you can build the flat with those funds. In some cases, it’s possible to refinance the current mortgage to include the construction costs for the flat.
Granny Flat Construction Loan Conclusion
It makes sense to opt for a construction loan to build a Granny Flat on your property. A loan specialist from Mortgage House considers all options before offering a set of loan terms. For more information, contact us today.
