Construction loans, also called building loans are designed specifically for those who are planning to build a new home or do a major renovation. Such construction may require securing a contract from a licensed or a registered builder or company.
Such loans are released via payment breakdown known as drawdowns to the licensed builder. This breaking down of payments is the amount paid to the builder after every construction phase. These includes:
Foundations of footings
Frame and Brickwork
Lock up
Second fix
Practical completion
These stages are also known as ‘the slab down, the frame stage, the lockup stage, the fixing stage, and the completion stage’.
Borrowers are expected to pay the interest due to the lenders while these draws are being made and the principal and interest payments will not start until the construction is finished. If you want to realize your dream home, a construction loan might be appropriate for you. Through the payment system of this program you can guarantee that the construction of your home will be completed along with the payout of your loan. Normally, the lenders also monitor the process of the construction and make sure builders have delivered their objectives properly and satisfactorily to the customers. Lastly, invoices are also needed by the lenders for your application.
Construction loans are different from standard home loan in terms of payment as the loans are drawn down in different construction stages as payment agreement. In this program borrowers usually only pay interest on the amount being drawn down. Upon the approval, the process starts, and lenders can now begin to make payments in five stages. The completion of work on each construction stage will be checked by a valuer prior to the releasing of the funds and interest is calculated based on this draw down.
When it comes to construction loans, Intellichoice, would be the perfect avenue towards securing a loan. Located in Australia, we are always ready to serve you whether you are living in Brisbane, Sydney, Perth, Adelaide, Canberra, Darwin, Hobart, or Melbourne by providing the construction finance you need for your building project. Call us now on these numbers – 1300 55 10 45 – so that we can assist you in the construction of your home by finding you the most suitable construction loan finance!
