You can apply for a construction loan when you are planning to build a new home or make key structural renovations to your existing home. Typically, they are considered land and construction loans, where the borrower applies for the loan to find the transaction of land and building of the property.
From the construction loans options provided, select an appropriate lender with favourable interest rates. Credific Finance equips you with all the data to guide you through this process.
Most lenders need documents showing three months of genuine savings to approve a home construction loan. Another way of getting a deposit is through a family guarantee.
Lenders will review your income and employment history to ensure you're able to repay the loan with the interest amount.
The lender will need a detailed construction plan to ensure the value of the finished property is not less than the offered loan size.
Construction loans are disbursed in stages known as progressive draws, unlike other one-time drawdown loans. The number of stages can differ depending on the various factors. Generally, there are five stages to it. They are:
To enable the overall strategy, the process starts with some easy to answer questions, so that we can learn and understand more about you, your current situation and what you'd like to achieve
To enable the overall strategy, the process starts with some easy to answer questions, so that we can learn and understand more about you, your current situation and what you'd like to achieve
To enable the overall strategy, the process starts with some easy to answer questions, so that we can learn and understand more about you, your current situation and what you'd like to achieve
To enable the overall strategy, the process starts with some easy to answer questions, so that we can learn and understand more about you, your current situation and what you'd like to achieve
To enable the overall strategy, the process starts with some easy to answer questions, so that we can learn and understand more about you, your current situation and what you'd like to achieve
Your lender will schedule a final property inspection to ensure that the property has been completed according to the proposed specifications. Construction loans are typically structured as principal and interest (P&I) loans, but during the construction period, borrowers only need to make interest-only (IO) repayments. This period usually lasts 6-12 months. Once construction is finished, borrowers will then begin making both principal and interest repayments which is generally due one month after the completion of the construction.
A construction loan is designed for those looking to build a new home, investment property, or make major renovations. Unlike a regular home loan, it lets you make payments to your licensed builder in stages as the construction progresses. This type of loan offers the option of paying only interest during the building phase and only on the amount you have used.
Progress payments allow you to access your construction loan in stages, enabling you to pay your builder at important points during the building process. You will only incur interest on the money you have used. Before making the last progress payment, a satisfactory valuation from one of our valuers is required. This ensures that the construction has been done according to the original plans submitted.
The standard stages of construction are:
1. Preparation – plans, permits, fees, insurance, etc.
2. Foundation – levelling the land, laying the slab, excavations, plumbing, etc.
3. Framing – constructing walls, roof trusses, windows, door frames, etc.
4. Lock-up – adding everything you need to turn your building into a house and locking it up.
5. Fix-up – plastering, sealing, adding your appliances, bathroom installed, etc.
6. Completion – site tidied, fences up, and builders receive final payment.
The disbursement of your loan will occur as needed, meaning you will only incur interest on the amount of the construction loan that you have utilized.
If you’ve chosen a registered builder, you may be asked to provide:
• A signed copy of the Industry Standard Fixed Price Contract
• A copy of building plans and council permits
• A copy of the builder’s licence
• The builder’s bank account details
• Copies of insurance policies, including Builders All Risk/Public Liability Insurance, Domestic/Home Warranty Insurance, and Public Liability Insurance
No. If you want to borrow money for more than just the build (for curtains, blinds, furniture, appliances and so on), you may need a separate loan. Talk to us about your options.
Yes. Participating Lenders offers construction loan under the Home Guarantee Scheme as part of this Australian Government initiative.
