In the case of an ordinary home loan, the house stands as collateral, which is difficult if you are going to build a house as there is still nothing to use as collateral.

However, since the cost of building a house is so high, most people have to borrow money in order to have a chance to manage the costs.

This is where a building credit comes into the picture

This is where a building credit comes into the picture

Building credit can also be called for other things such as building loans, even though building loans are to a large extent a small other type of loan.

It is a loan that you take during the actual building of a house. The money is then paid out continuously during the construction when various things like land, land, etc. are to be paid. Should it then prove, for example, that the building will be a little cheaper than it was intended, you will not have to pay any extra interest.

Because unlike other loans, you do not determine a sum from the beginning that you take out, but the money is only taken out if needed (up to a maximum limit) which can mean that the loan will be smaller.

To get a loan of this kind


You need to show you drawings, budgeted costs, who will build, etc. for the lender. They will then make a decision whether or not it is an economically justifiable building. Thus, it is important to have done a proper planning job before applying for a loan. How much money you can borrow is part of the expected value of the home and then as always how your own financial situation looks. This is determined after a credit check has been performed.

After the building is completed, the home must be inspected and then insured. When this is done, a mortgage is taken out of the home and the building credit is converted into a regular mortgage instead. Which is advantageous for you as the cost of a mortgage is normally lower than for a building credit.

Finding a lender that offers building credit should not be a major problem if you only have an organized finance. The vast majority of those who offer mortgages also offer their customers a building credit, which means that the big banks, for example, are good places to look up.