Understanding The Financing Process

While building a new house can be a creative and exciting experience, it can also present some complicated financial questions.  How do you estimate the cost to build a new house?  What is the process for arranging a mortgage when you’re still living in your current house?  How do you free up the necessary equity? The team at Lithium One can help guide you through this process.  We’ve helped many others in Prince George identify their budgets, work with local mortgage brokers, and find the necessary equity.  Our team will help you, too.

The Basics Of Custom Home Financing, Explained

Every project starts with a visit with a local mortgage broker.  They’ll meet with you to discuss your finances, the cost to build a new house, equity, and borrowing abilities.  (If you’ve ever arranged a mortgage in the past, you’ll know what to expect.) 

Next, the mortgage broker will make an assessment as to how much you can borrow.  This gives you an idea of how much you have to work with when building your home.  It provides a maximum budget for the project and will help you understand how much you can afford to spend.

Once you have a loan approved, Lithium One can begin construction on your home.  We take several draws throughout the building process – typically, one at the start of construction, one at the lockup stage, and one at the completion of the project. 

Finally, at the end of the building process, your home is now complete and you have two mortgages, one from your old home and one from your new home.

Knowing the cost to buy a house will affect the financing you need
Understand the custom home building process with Lithium One, a home builder in Prince George

How Lithium One Makes Custom Home Financing Easier

Lithium One offers what is known as a fixed-price contract.  This means that the price we discuss with you is the final price you’ll pay.  If you decide to make changes to your home as the construction progresses, we’ll discuss them and present you with a new price to agree on before moving forward.

In contrast, many home builders prefer to offer a “cost plus” contract.  They charge for the cost of building your home, plus an agreed upon rate of profit.  Unfortunately, the problem with this pricing model is that all the risk is on the home buyer, not the home builder.  There is no cap on the price of the project.  As the costs of the home building go up, so does your responsibility to cover all those expenses, whatever they may be.

We understand that cost-plus contracts can look very attractive at the beginning when comparing quotes.  However, Lithium One believes in providing transparency in our contracts.  That’s why we’ve committed to providing you the full cost up front, rather than increasing your cost as the project progresses.

The cost to buy a house will affect how much equity you need

Let's Talk About Your Plans.

A good home builder can advise you throughout the process – that includes early planning stages like finding a lot or arranging financing.  Contact us today to start the conversation.