Construction loans, also called building loans are designed specifically for those who are planning to build a new home or to make a major renovation while also getting a contract from a licensed or a registered builder or company. In this, there is a payment breakdown called progress draws after the lender determines the total amount needed to pay for the builders. This breaking down of payments is the amount paid to the builder during the construction phases which are ‘foundations of footings, frame and brickwork, lock up, second fix and practical completion’ or also called ‘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, 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 drawdown.
It was reported recently at the Australian Bureau of Statistics that from June 2017 and June 2018, there was a significant lowering of the values on home properties that is why many Australians think that this could be the perfect time to invest for a home as buyers might enjoy the decrease in pricing. But if your plan is to rebuild or renovate your home, or just construct a house in your own property, construction loan is really suitable for these kinds of projects!
When it comes to construction loans, our company, Intellichoice, would be the perfect option for this. Located in Australia, we are always ready to serve you whether you are living in Brisbane, Sydney, Perth, 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!