Get to know the building loan's rules and regulations. We are here to guide you through the entire process of applying for a building loan, and that includes understanding the exclusions and specific loan limits.
The bank will require the builder to sign a waiver of lien.
The bank would require proof of a Contractor's All Risk Insurance Cover for the duration of the building process until completion.
The builder must comply with the bank's conditions, as and when required, and ensure that the project is completed within 12 months from date of registration.
Inform the builder and the bank of any problems, concerns or delays in the building process. The bank will not act as clerk of works on your behalf and in need, you may
want to appoint a suitable qualified professional person to supervise or oversee the project. It is important to note that you have appointed the builder and all disputes
are to be discussed directly with the builder and the NHBRC where deemed necessary.
Ensure that the contract you sign with the builder does not comprise of conditions which will be prejudicial to you. In need, consult with a legal advisor or a suitably qualified professional to assist you before signing the contract.
Request progress payments only if you are satisfied with the progress and the amount requested by the builder
Service your interim interest by making regular monthly repayments for these amounts as this will avoid any shortfall that may occur.
Ensure that you and your builder understand all the bank's conditions of loan and that all the conditions are being complied with at the times required/stipulated by the bank.
Ensure that on completion of the building that your Home Owners Comprehensive Insurance Cover is in place. The Contractor's All Risk Insurance Cover only provides cover from the date when construction commences until date of completion/occupation.
Important points to consider
FNB Home Loans will NOT finance 'owner-builders'.
Unconventional construction methods will not be considered, unless prior approval is received from the FNB Property Valuations Department.
Building operations must commence within 3months after registration of the mortgage and must be completed within a further 9 months thereafter. Building to be complete within 12 months of registration.
The building contractor must carry Contractor's All Risk Insurance Cover and proof thereof must be submitted to the bank.
A property valuer will inspect the building progress with each progress payment request, and will report to the bank accordingly, prior to any progress payment being made.
Interest rates are limited to variable until the building process is complete.
Customers may not be granted the Flexi, Re-Advance or Future Use options on their building loan until it has been fully completed and the loan converted into a traditional home loan.
It is mandatory that Building Loans interest payments are settled via debit order or salaried stop order, and the responsibility for any interest payments rests with the mortgagor.
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, a minimum deposit of 10% of the total package
price (land + contract amount) is required in all instances; this however could increase dependent on the credit
profile score of the applicant(s). The deposit will be based on the lower of the total package price, or FNB's
assessed market value on completion. If the applicant credit profile score determines a loan to value amount less
than 90%, no amount is redeemable at the end of the construction period. If for any reason during the period of
construction, the applicant(s) credit profile deteriorates, the bank reserves the right to retain the redeemable amount.