Construction Loans

Construction Loans to Build Your Dream Home

Building a new home is one among many ways you can make the most out of your vacant plot of land. It’s also a way to get maximum returns on your property investment.

But it’s ridiculous to claim that home construction comes without any complications. Looking for finance and overseeing the development process can be pretty intimidating. That’s why it helps to have lending specialists on your back to make the application and financing process hassle-free.

We’ll Help You Get Finance for Construction & Renovation

Construction loans are also perfect if you want to perform significant renovations. These include knocking walls down for structural renovation or deciding to extend your house.

What are Construction Loans?

Construction loans are designed for borrowers looking to build a new house or perform major structural renovations on an existing one. Moreover, construction loans are given in stages called progress payments. 

What are Progress Payments in Construction Loans?

In a nutshell, progress payment refers to subsequent payments sent to your project builder. The payment follows a fixed-price building contract. Moreover, your loan will be provided by the bank or lender in stages and not as a one-time full amount.

What are the Requirements for Construction Loans?

Aside from the common requirements for most loan applications, you’ll need the following documents for construction loan pre-approval:

• Schedule and specifications of finishes
•  Tender or Builders, including any variations
• Proposed Construction Plans for Local Council
• Proposed List of Out-of-Contract Materials and Projects (Pool, Landscape, etc.)

Furthermore, you need to provide the following to get formal approval for your funding:

• Council-approved construction plans
• Fixed-price building construction contract

Depending on your situation, your bank or non-bank lender may also require additional documents. With our help, you’ll know what you need to prepare along the way, so you don’t miss a step throughout the loan approval process.

Can I Apply for a Construction Loan as an Owner-Builder?

Definitely, some banks offer construction loans for owner-builder customers. Here are some essential requirements to help you prepare:

• Owner-Builder Independent Advice Report
• A comprehensive and clear explanation of why proceeding with the project as an owner-builder is more cost-effective than using a licensed builder.
• Proof or demonstration of your construction experience and background in successfully performing and completing an owner-builder project.

However, only a few banks will offer construction loans to owner-builders. That’s why once we find the right lender to finance your project, the next step is performing due diligence to get your loan approved.

How Much LVR Can I Get for a Construction Loan?

You can get as much as 80% LVR with no LMI for your construction loan. That’s because it is still under a standard lending policy. We can also negotiate more than 80% LVR, but note that it will incur LMI since the bank becomes exposed to more risk.

Are There Extra Fees Incurred When Applying for Construction Loans?

Yes, and most of the time it is incurred on additional valuation costs that you need to perform throughout the construction process. This is crucial to keep your property on track and that it doesn’t exceed the fixed price contract once the project is complete.

Furthermore, other processes and transactions for progress payments also have additional costs. That means you may need to pay a fee for every progress payment. But with a team of financial strategists on your back, you can rest assured that all your expenses are kept on track and that you can get finance to proceed with your construction project.

Contact us today to discover how you can get approved for a construction loan and turn your long-awaited project or expansion into reality.