Instead of getting a lump sum, your lender will consider the total amount you need to borrow to complete your construction and break down the full amount into separate payments. These instalments are known as progress draws and correlate to the 5 stages of construction. During construction, you will only repay interest on the amount of the loan you’ve used. Full principal and interest payments only begin once you get the keys to your new home.
Construction loans may be a great way to purchase a vacant block to build on and save money on interest during construction.
The bank will ask for your plans and specifications, as well as a contract from a registered builder. While council approval is necessary, it is generally only required once you reach the stage of seeking formal approval.
If you want to build your dream home or are looking to build an investment property, we would love to help you. We’ll take the time and care to walk you through every step of the process, to ensure you begin your project with confidence.
Make an appointment with us today to start the process.