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Can you Get a Loan for Land and Construction? Find Out Your Possibilities Today and Explore your Way up

            South Africa offers a multiplicity of interesting options regarding finance and loans, especially for land and construction matters. Different financial entities offer this type of service: the loans are varied and they come with different rates and terms. There are certain items that should be taken into account if you are thinking of getting a land and construction loan.

Which companies offer these loans?

            There are different banks that offer them. One of these companies is LandBank. Another company is FNB Bank. But there are multiple options in the market.

Can I get loan for land purchase?

            Yes, you can. In general, these loans can be quite expensive if they are not managed properly. Buying land is not cheap treat and so some conditions need to be taken into account.

What loan can I get to buy a land or a house?

            In order to buy a house or buy land, you can apply for a traditional home loan and long term loans. Revolving loan facilities also help a lot in these cases. FNB Bank, for instance, you are given the possibility to construct a house, expand the one that you have, to get additional space and more land.

How much money do you have to put down to buy land?

            In general, land loans and acquiring land can be quite expensive. FNB Bank makes it clear to customers that there are various items and costs that they need to take into consideration.

How much does it cost to buy land and build a house?

The prices vary from design to design. The location of the land, the quality of the soil in which is built are some of the factors that clients must have in mind when purchasing land. They should also consider the following expenses:

  • A deposit of the purchase price. Clients are asked to pay this deposit in order to secure the land they have chosen. This amount is generally stated in the contract and will vary based on the value of the property.

  • They will have to pay to an architect. He will be the one designing the house, creating the plans and drawing whatever parts or changes need to be done. The fee will be stated and established by the architect himself or herself. The more complex the structure of the plans, the more money you will have to pay.

  • You will have to pay to the builder or the contractor. This person will be in charge of giving you the contract price. You will find here all the building costs implied. The design will determine or will have an impact on these costs.

  • The fee of enrollment. In order to register the new house, you will have to pay a fee. In general, it ranges from R6500 to R34000.

  • The professionals of the industry. This may refer to the structural engineer, a quantity surveyor.

  • The costs of registration. You will have to pay to an attorney so that you can register the land.

  • The costs of transference. This means that you have to transfer the ownership of the new home. The purchase price of your home will affect this fee.

  • You will have to pay for sundries and postage. You will have to pay for certificates and documents that will need to be submitted to an office or a estate agent. They start at R300.

  • You will have to pay for the transfer duty, which is a government tax.

  • You will also have to take care of an initiation fee, which is charged by FNB in order to process the application of your loan.

  • Finally, you will have to pay for a service fee, since it counts as a new registered loan.

Do you have to put a down payment on a construction loan?

Yes, you do. In most banks you will have to make a small deposit or a down payment so that the bank can secure your construction loan.

How long does it take to get approved for a construction loan?

This varies based on the bank that you choose. There are banks that may take a week in order to process your application and approve it, if that were the case. Other companies take only a few days, while others take longer. You should always ask for this kind of information to the members of staff of the bank you are interested in.

How does a construction loan work?

            In general, all you have to do is evaluate the different entities that offer construction loans. Once you have chosen a company, you will have to apply for a construction loan. There are some companies that enable you to apply online. Others only give you the possibility to apply in person by visiting the branch or the office that is most convenient to you. You will have to fill out the application form that the bank gives you with detailed bits of information. Then, you will submit it. The bank will take the time to evaluate your application and will probably take a look at your financial records.  If everything is ok and you meet their requirements, you will be contacted by the bank. They will give you the loan through an appointment. You will have to make a small down payment and you will receive the fund that you need for your construction loan. The rates of the loan might fluctuate with time.

What is it?

It is a kind of loan that enables you to acquire and purchase land

How does it work?

You apply for the land loan and the bank examines your application.

What should clients take into account?

The bank will examine your credit score, so clients should check that.

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            In conclusion, having a construction loan can be of great help when thinking of building a house or buying land. However, you must not forget that these kinds of actions can be quite expensive and so you should look into the different possibilities. And remember, South Africa is full of financial entities that offer construction loans and benefits that come with it, so do not hesitate to get in contact with one of them and start working your way up.

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Questions and answers

Could I remodel my kitchen with a construction loan?

Yes, you can. In general, home loans are used for that sake, though.

Is a land loan expensive?

The loan itself is not. However, what it involves makes it expensive.

Do I get longer terms for using a land loan?

That will depend on the bank that you choose.

Leave your rating about Can you Get a Loan for Land and Construction? Find Out Your Possibilities Today and Explore your Way up

I was finally able to purchase the land for my house

The loan is quite beneficial for rebuilding your home

The construction loan allowed me to carry out remodelling

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