Construction Home Loan

Construction home loans

If you are looking to build a new house rather than purchase an existing property then a construction home loan is for you, also known as house & land loans.

About Construction Home Loan

It’s just another loan that pays your nominated arm’s length builder (owner builders are unacceptable) for the sections that are completed, we do not pre-pay builders for building that has not been delivered, whilst ensuring that you do not pay interest on works that have not been completed. Ask your mortgage broker this question: What does “cost to complete” mean? We try to make construction loans easier by only requiring interest repayments during the construction phase and do not recommend buying land without an imminent building contract. Latency may result in unexpected financial pain.

Construction loans are designed to make progress payments, minimise risk and interest as much as practicable. Progress payments up to 95% LVR are made with your approval and a valuer’s second opinion. Lenders generally do not overpay, retaining sufficient funds to complete your new dream home.

Your mortgage broker can assist in building up to 4 dwellings on a single title with ease to 80% LVR

How do construction loans work?

Making the decision to build a home is exciting. From the very start you can create your dream home beginning with a block of land to the top of the roof. You can stamp your personality and your vision on your creation. Finding the right home loan to create your dream is what experienced mortgage brokers are all about. Our construction mortgages can be a suitable option for you and your family, if your dream is to build a home, or a knock down & rebuild. Construction mortgages can offer you flexibility and staged payments to make things a little easier. With a fixed price contract from your builder, a construction loan means we will make payments at various stages of the building process. The repayments are not made until certain milestones have been met and interest is only charged on what we have paid out, not the overall loan amount. Once your home loan application has been successful and your land has been settled, you will have a fixed period to complete construction (generally up to 24 months, preferably 12).