Building or Construction Loans
Are you thinking about building your dream home or renovating your existing one? Maybe you have a fixer-upper! Whatever your plan is we can help.
Through our holistic approach to lending, you will have the tools and “know-how” to make the right decision for your future. Most of our lenders offer loans suitable for owner occupiers, investors, owner builders and renovators with progressive drawdowns which will meet your sellers and builders’ contractual requirements.
For example, if you have already signed an Offer and Acceptance to purchase your block and are ready to build, meaning you have a building contract in hand, we can help you apply to borrow the total funds required under one facility. The application will request the lender to formally approve the funds required for the land purchase and construction within your specified finance dates. This type of loan allows you to make progress draws for the land and construction.
Don’t worry if you haven’t found the land, we will assist you with home loan pre-approval so you can go out and purchase the land and shop around for the house of your dreams with confidence knowing what your pre-approved finance limit is.
Once the construction loan is drawn down (usually for the land or first progress payment), you can decide to have interest only repayments to help lighten the load during the construction phase and on final progress payment, then convert your loan repayments to Principal and Interest, unless you have specifically requested an interest only home loan. At final drawdown you’re ready to take occupation of your new home.
The Construction Process:
1Customers signs the builders quote, draft plans for preparation of a fixed price building contract or costs plus contract. Tentative on completion valuation arranged.
2Preparation of council plans specifications, permits, connection fees, and relevant insurance.
3Base pad – Includes laying the slab, footings, and brickwork.
4Frame – The house frame is constructed.
5Lock-up the windows and doors, roofing, exterior and insulation are all completed.
6Cosmetic and internal building is fitted out with your kitchen, bathrooms, floor coverings and plumbing and electrical. House is plastered and painted.
7Completion timeframe 12 months – Fences, landscaping, driveways. Builder makes final claim for payment. Keys handed over after payment is received.
There are four main documents required for all construction loans:
- Fixed Price Building Contract including progress payments schedule.
- Tentative on Completion (TOC) Valuation – Your Broker will arrange.
- Council Approved Plans or Building Permit (prior to settlement)
- Builders Insurance (prior to settlement)
Are you Ready? We can help you get home loan healthy and application ready, just give us a call and speak to use today. Contact us.