Building your

Dream Home Our Building Guide outlines some of the key things you need to consider Building a house can be an exciting when building or renovating. yet demanding task, but given the right support, you will enjoy many relaxing years in your dream home! working drawings with detailed Consider lead times on certain products specifications. Be sure to discuss the 7. Things You Should like windows. They can take several weeks features that fit your lifestyle, the size of your to be delivered to your site. If you order them lot and your budget. Once completed, these Know When Building too late it can severely impact your timelines. plans are the instructions for the builder; the better they are, the easier the build. Your Home 8. Do not use funds designated for your project to buy fixtures, fittings, furniture or 4. Give yourself enough time to get 10 any other materials outside the initial scope at least three quotations for absolutely of the individual project stages. This can everything to be done on the project well The journey to building your home should negatively impact whether there is enough 1. before sub-contractors have to be on site. begin with a conversation with one of our money to ensure your project is completed If you rush this part of the project you will mortgage specialists to determine your 2. Choosing the right land on time or within budget. mortgage qualifying limit. to build on is just as important as choosing not get the best results. the right house. Whether the land you own Stay in regular contact with your Choose a builder/contractor that 9. was gifted, inherited or purchased there are 5. contractor/builder. Keep a record of progress comes highly recommended and whose a few important things to consider before reports, make frequent unplanned visits to work you have physically seen and building a house on it. These include: your site to see the progress being made and inspected. Ensure that you do a a. The cost to complete your house. deal with issues as soon as they arise, as it thorough investigation into previous Costs can escalate substantially if your land will likely be cheaper for you in the long run. hides surprises below the surface. Ideally, projects he/she has managed and also speak to past clients. you should have test holes done on multiple 10. Always keep your mortgage specialist areas of the land to assess how deep you may abreast of your progress at every stage. Your Your builder/contractor will be have to dig before you reach solid rock; CIBC FirstCaribbean mortgage specialist has responsible for the site and everything b. The risk of flooding or landslides in extreme a wealth of experience and knowledge in that happens on it and can make or weather conditions; managing construction projects and can help break your project. Therefore, it is Many times clients create elaborate house c. restrictions (e.g., residential vs. you avoid many of the crucial that you spend time selecting plans only to be disappointed when they agriculture); this can impact how common mistakes the right one. realise their dream home will cost more much financing you may be clients tend to make. than they can afford. able to obtain; Avoid making major design d. The distance to work, 6. changes when the project has started. To avoid this common mistake, engage your public transportation, Not only will this be costly, but may CIBC FirstCaribbean mortgage specialist and schools, recreational require planning approval again. use our simple and seamless mortgage health facilities, grocery Even small changes in your fixtures check-up to find out exactly how much you stores and other and finishes, such as changing from can qualify for. retailers and close ceramic tiles to porcelain tiles or laying family members. Knowing how much you can afford can guide your tiles straight vs diagonally or you when planning your design and help you 3. It’s recommended changing from sash windows to to get into your home much faster. that you share your casement windows can eventually vision with a professional cause your project to run over the who can output your ideas to agreed budget.

1. 10 Things You Should Know When Building Your Home cont’d

working drawings with detailed Consider lead times on certain products specifications. Be sure to discuss the 7. like windows. They can take several weeks features that fit your lifestyle, the size of your to be delivered to your site. If you order them lot and your budget. Once completed, these too late it can severely impact your timelines. plans are the instructions for the builder; the better they are, the easier the build. 8. Do not use funds designated for your project to buy fixtures, fittings, furniture or Give yourself enough time to get 4. any other materials outside the initial scope at least three quotations for absolutely of the individual project stages. This can everything to be done on the project well The journey to building your home should negatively impact whether there is enough 1. before sub-contractors have to be on site. begin with a conversation with one of our money to ensure your project is completed If you rush this part of the project you will mortgage specialists to determine your 2. Choosing the right land on time or within budget. mortgage qualifying limit. to build on is just as important as choosing not get the best results. the right house. Whether the land you own Stay in regular contact with your Choose a builder/contractor that 9. was gifted, inherited or purchased there are 5. contractor/builder. Keep a record of progress comes highly recommended and whose a few important things to consider before reports, make frequent unplanned visits to work you have physically seen and building a house on it. These include: your site to see the progress being made and inspected. Ensure that you do a a. The cost to complete your house. deal with issues as soon as they arise, as it thorough investigation into previous Costs can escalate substantially if your land will likely be cheaper for you in the long run. hides surprises below the surface. Ideally, construction projects he/she has managed and also speak to past clients. you should have test holes done on multiple 10. Always keep your mortgage specialist areas of the land to assess how deep you may abreast of your progress at every stage. Your Your builder/contractor will be have to dig before you reach solid rock; CIBC FirstCaribbean mortgage specialist has responsible for the site and everything b. The risk of flooding or landslides in extreme a wealth of experience and knowledge in that happens on it and can make or weather conditions; managing construction projects and can help break your project. Therefore, it is Many times clients create elaborate house c. Zoning restrictions (e.g., residential vs. you avoid many of the crucial that you spend time selecting plans only to be disappointed when they agriculture); this can impact how common mistakes the right one. realise their dream home will cost more much financing you may be clients tend to make. than they can afford. able to obtain; Avoid making major design d. The distance to work, 6. changes when the project has started. To avoid this common mistake, engage your public transportation, Not only will this be costly, but may CIBC FirstCaribbean mortgage specialist and schools, recreational require planning approval again. use our simple and seamless mortgage health facilities, grocery Even small changes in your fixtures check-up to find out exactly how much you stores and other and finishes, such as changing from can qualify for. retailers and close ceramic tiles to porcelain tiles or laying family members. Knowing how much you can afford can guide your tiles straight vs diagonally or you when planning your design and help you 3. It’s recommended changing from sash windows to to get into your home much faster. that you share your casement windows can eventually vision with a professional cause your project to run over the who can output your ideas to agreed budget.

2. Information Required

✔ Confirmation of assets and debts • Last three (3) months’ statements from your financial institution (i.e. savings, chequing, credit cards, hire purchase accounts, loan accounts) • Proof of the required down payment, legal and closing cost (i.e. evidence of the source of funds will also be required) • Credit Bureau report (where applicable).

✔ Salaried Employees • Letter of introduction from employer Unlike a standard mortgage where your confirming remuneration, the position mortgage specialist will provide you with one you hold within the company and length large lump sum when your loan is drawn, a of employment construction or bridging loan is typically • Most recent pay slip. drawn in multiple stages over 6-12 months. This construction loan usually attracts a ✔ Self-Employed applicants slightly higher interest rate than the standard • Last two years’ financial mortgage until your house is completed and statements including: is then converted into a mortgage. • Profit & Loss statements • Balance sheet Here is a list of the key • Cash Flow documents you will need when • Notes to Financials applying for a construction loan. • A full set of tax Your CIBC FirstCaribbean assessments for the mortgage specialist will tell you in detail last two years what’s required but here’s an outline: • Bank statements for the past twelve (12) months on ✔ Proof of identification the operating account for the period • Valid identification (i.e. passport, matching the financial period driver’s license or national ID card) • Interim or management accounts may be • Jamaica only: Taxpayer Registration warranted depending on the year end Number (TRN), proof of age (copy of date of the financial statements. E.g. If birth certificate), 2 references. the year end is 31st October and loan presented in June of the following calendar ✔ Proof of address year, interim financials should be obtained. • Recent utility bill (less than 3 months old), valid driver’s license, recent statement from a financial institution.

3. Information Required cont’d

✔ National Housing Trust Requirements • Initial valuation - an initial valuation (Jamaica only) report completed by a member of • Completed NHT application form CIBC FirstCaribbean's panel of valuers, • NHT eligibility letter instructed by CIBC FirstCaribbean. • NIS card ✔ During the build There are also a number of important • All legal work must be completed documents that you will be asked to provide before the release of funds. as part of the construction process. • ’s report - before the ✔ At the start of the project release of a stage payment, a report from • Planning permission (usually valid for the assigned quantity surveyor is required 3 years only) - full permission needs to be to confirm the progress of work that has in place at the mortgage application stage. been completed.

• A copy of approved plans from the • Land surveyor’s report or regulatory Environmental Protection Department confirmation that the property being is required where applicable. built is within the property’s boundary.

• Detailed builder’s estimate and contract • Regulatory approvals to start the next showing a breakdown of materials and stage (where applicable). labour cost. Fixed price construction contract or signed agreement showing • Stage draws will be executed as per detailed costs broken down into stages agreed builder/client/Bank schedules of construction and realistic start and previously accepted by all parties. completion dates. ✔ At the end of the project • Construction completion valuation - when the build is completed, a final valuation report (by the same valuer who completed the initial valuation report) is required. This report confirms that the forecast market value has been reached, along with the current fair market value.

• Regulatory approval - evidence of regulatory approvals (where applicable - certificate of compliance or certificate of occupancy) will be required to convert the facility into a mortgage.

• Funds held for retention purposes will be disbursed at the end of the agreed withholding or retention period.

4. Costs Associated with Building

Let’s look at the various costs that you are likely to incur as part of your building 4. Insurance project. It’s important to understand Mortgage protection cover these from an overall project perspective and building insurance must be in and also for your mortgage application. place before the first draw down of funds. Your CIBC FirstCaribbean mortgage 1. Cost of the land specialist can assist you with obtaining these. If you do not already own the land on which you intend to build, you must consider this 5. Timescale and budget cost when seeking financing. Obtain detailed time estimates up front. Overtime can have a significant impact on the 2. Construction cost overall cost of the building project or if you This will be the bulk of the cost of the project need to employ extra people to get a delayed and should include estimates for all of the project back on track. In addition, the longer elements of your building project. your project takes to be completed, the more bridging interest you will pay. Balance your 3. Fees and other costs expectations with your budget. Some fee costs include stamp duty, legal fees, planning approval fees, and valuation fees. 6. Contingency cost Remember to budget for professional fees Because construction projects are seldom associated with design and planning (e.g., completed at the exact amount of the contract and engineer). Ask about local sum, you may also qualify for a separate loan authority fees that cover the cost of roads, for any unforeseen circumstances. This loan verges, parks and other amenities attached is a short term loan of 5 years, to the locality (where applicable). only to be drawn if needed.

This guide has been published for general information purposes only and is not a substitute for legal and other professional advice. It is strongly advised that legal and professional advice is sought when building. The contents of this document For more information please are a reference point and subject to change from time to time. call toll free: 1-866-743-2257

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