Skip to main content

Construction Loans

Construction loans can be confusing, allow us to help.

Embarking on a construction project, whether it’s building your dream home or developing an investment property, involves a unique set of financial considerations. As a Mortgage Adviser, I provide insight into the construction loan process, helping you transform your building aspirations into reality.

A construction loan is a specialised form of financing designed to fund the building of a new home or development project. Unlike traditional home loans that provide a lump sum payment, construction loans typically release funds in stages as the construction progresses. Here are some key aspects of construction loans that you should consider:

Construction Loan Features

Progressive Drawdowns

Construction loans are drawn down in increments, known as progress payments, which correspond to the completion of different stages of the build. This means you only pay interest on the amount of money you’ve actually used, which can help manage cash flow during construction.

Fixed Price Contracts

Lenders typically require a fixed price contract with a registered builder, which outlines the construction costs and schedule. This provides certainty for both the borrower and the lender by detailing the exact cost of the build.

Lending Criteria

Construction loans often have specific lending criteria and documentation requirements, including council-approved plans, building consents, and a detailed construction timeline.

End Value

Lenders will consider the estimated value of the property upon completion when assessing your loan application. This ‘on completion’ value can impact the amount you are able to borrow.

Contingency Funds

It’s prudent to have additional funds or a contingency allowance in place to cover any unforeseen costs or changes to the construction plan that may arise.

Get Started.

As your Mortgage Adviser, I am here to help you navigate the complexities of construction financing. I will work with you to ensure you understand each step of the process, from the initial loan application through to the final drawdown and conversion to a standard home loan upon completion of your build.

My role is to provide personalised advice, helping you to secure a construction loan that aligns with your project’s requirements and financial situation. By offering support and guidance throughout your construction journey, you can focus on making key decisions for your build with the peace of mind that your financing is taken care of.

Building a new property is an exciting venture, and with the right financial framework in place, you can look forward to seeing your construction project come to life. Let’s lay the foundation for a successful build together.

Contact