Looking to build or renovate? Maybe a construction loan is right for you.
If you intend to purchase land and build a new home, construction loans allow you to pay your builder with progress payments at each major stage of construction such as laying the slab, putting up the frame and roof on, lock-up, fit out and at completion.
When you apply for a construction loan, the lender will need a copy of the building contract/tender and the plans. They will ask their valuer to provide an estimate on the completion value of the property.
Once your loan has been approved, the lender will issue a loan offer for you to sign and return, just like with any other home loan.
When your builder is ready to begin receiving payments for construction, final council approved plans, builders insurance and a drawdown schedule will need to be supplied to the bank.
The builder will send you an invoice, you will then complete and sign a drawdown request form and send to the bank. This way, you can ensure you are effectively managing the funds in line with the process at each construction milestone.
Construction loans can be used for major renovations to an existing property as well as new builds.
The good thing about construction loans are repayments are interest only during construction which may provide potential cash flow benefits to you.
If you are interested to learn more about construction loans and if they are right for your circumstances, we can help.
We will work with you from our first chat until you are in your new home.
Call Mortgage Choice in Mudgeeraba on 5559 2563, today. Or drop in and see us. We are located in Bell Central only 5 minutes from Robina Town Centre.