Construction Loans

Building your new home may sound hard, so why not let us simplify the process and show you step by step it’s really not that hard at all.  We will simplify and clarify the process and make it as easy as possible to help you with your new build!

Building your dream home or investment

Construction loans make it possible to build a home, or an investment property, when you might otherwise be unable to do so. Building a home can be a great experience if you want to design something unique or specific to your needs and the needs of your family, or for investment purposes. However, there are also significantly greater risk when procuring construction loans rather than just purchasing an existing already built home or investment.

Your personal mortgage broker will source the most suitable loan for your situation and guide you through each step of the way.

So how does it work?

With a construction loan, you can break up the draw down of the loan amount into five progressive draws, which parallel the construction phases. As one phase of the construction is complete, you are able to draw down the next portion of the loan. This means that interest is only being calculated on that amount which has been physically drawn down, and you are only making repayments on the portion you have used to actually pay for to the Builder. When construction is complete, you can nominate which product or loan type your loan reverts to. These stages normally consist of:

• Deposit
• Base Stage
• Frame Stage
• Enclosed Stage
• Fixing Stage (roof)
• Practical Completion (lock up)

Some things you need to get before applying

1. Plans & specifications
2. A fixed price contract from a registered builder
3. Council approval

Some of the potential risks include

1.The home will not be completed on schedule or on budget

2.When completed, the home will not be worth as much as it cost to build

If you are willing to take on the risks of a construction loan, and you have the financial cushion available to help you to potentially cover any costs associated with market risks, a construction loan may be the right choice so you can build your dream home or purchase your next investment property.