If you are building a new home, a construction loan is the way to go. It takes into account the fact that you won’t need all the money up front, which means you only pay interest on amounts as they are advanced.
And if you are wanting to buy a house and land package, this can be quite attractive to lenders as they are able to review the plans and contract upfront.
It’s important to be clear about what inclusions your package contains (for example, does it include floorcoverings, driveway, landscaping, window dressings etc?), because if they’re not included, you may need to increase the size of your loan to cover them.
Your lender releases the funds as each milestone in the build is met, and they will generally insist on a property inspection before making the final progress payment.
Construction loans are also available for off the plan projects, and these are more common for apartment projects.
As a finance broker, we have access to a wide range of construction loans from many of Australia’s leading lenders. We can help you choose the right loan for you, and assist you at each step of the application process.
Contact us today to learn more.