construction loans.
Building your dreams requires capital and a helping hand, we can help you.
is a construction loan what you need?
​A construction loan is a specialised loan designed to finance the building of a new property.
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1. The loan is secured by the property being constructed and is typically disbursed in stages corresponding to the completion of different phases of the project.
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2. When you apply for a construction loan, you will need the building contract or tender, council approved construction plans, any additional quotes for extras such as landscaping and secure the land with a contract of sale if not already owned.
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3. The lender will appoint a valuer to estimate the property's value upon completion. Your loan will be based on the lesser amount between the land price plus construction costs or the estimated on completion value.
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4. Once approved the lender will issue a loan offer for you to sign.
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5. Before your builder starts receiving payments from the bank, they must submit documents such as insurance details and stage invoices inline with the agreed drawdown schedule.
how much do I pay during construction?
During the construction period you will only be charged interest only repayments on the amount that has been disbursed so far. This means your repayments will start small and gradually increase as more funds are drawn and used for construction.
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Before each draw is released, the lender may require an inspection to verify that the work has been completed according to the plan. This ensures that the funds are being used appropriately and that the construction is progressing as scheduled.
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Once the construction is complete the construction loan will be converted into a standard home loan. At this point, you will start making regular principal and interest repayments just like a standard home loan.