What is a building loan?

Question

MyProperty Namibia · Accepted Answer

A building loan is used to finance the construction of a dwelling on vacant land or to finance additions and renovations to an existing home. A building loan is where a portion of the approved loan amount is retained by the bank and the funds are advanced to the borrower in stages as progress payments during the construction period. The bank will only make a progress against construction work already completed, therefore the contractor has to be in a position to fund the purchase of building materials and carry out the construction work until the work has reached a stage where a progress payment can be made by the bank. When applying for a building loan, you will need:. -------------------------------------------------. • your namibian identity document/valid namibian passport • proof of residence (i.e. A copy of your most recent municipal account, not older than 3 months) • if married: a marriage certificate and antenuptial contract (if applicable) • if divorced: a divorce order together with settlement agreement • if widowed: a death certificate • proof of income (latest payslip / latest financial statements) • if banking with another bank: 3 payslips and 6 months bank statements • deed of sale of erf- property and approved building plans • a deposit might be required, depending on the purchase price or the valuation of the property, whichever is the lowest