Owner Builder Loan Difference vs Traditional Home Loans
Owner builder loans are very different from the traditional home loans that we have in Australia. Unlike the usual mortgages homeowners avail, owner builder loans are more rigorous and require a different set of requirements, unlike regular home loans.
In an Owner Builder setup, the client applying for a loan is a contractor that will owner build their home. It is not enough to have experience in constructing or be an employee in a construction company to be able to get access to funds that will help you build your own home. You will need to be a registered contractor – complete will all the documentation, permits and licenses that prove your authenticity as an able contractor.
Banks and lenders are also more critical when receiving and approving owner builder loans applications. Owner builder loans are considered as high-risk loans. There are a lot of processes and people involved in construction. Such processes, when handled inappropriately can potentially halt the construction or in some cases leads to an incomplete construction project. When this happens, this puts the repayment of the approved loan at risk.
Understanding why Intellichoice Owner Builder Loans differ from Traditional Loans ” and the body should read: “This video provides insight into how Owner Builder Loans are different from the Standard Residential Construction Loan that most people use for building a home with a registered builder. We cover the loan ‘Draw-Down Stages’ for Owner Builder Loans, what information is required when applying for loans and the significant differences between the lending types. Understanding how Owner Builder Loans are set up and drawn means your ability to prepare for upcoming stages is optimized. Get in with for a conversation about how we can support your Owner Build.
Intellichoice has 15 years of experience in Owner Builder loans. We work with a group of banks and lenders that still believes in helping the average Aussie in securing an owner builder home loan. Working with us gives you access to the best lenders in Australia, with the best interest rates and loan features perfect for your circumstance.
Only builder home loans differ from standard loans in so much as when you are constructing using a fixed price building contract. That fixed price building contract is provided to the lender and that’s really what the lender lends against any progress draws that occurred throughout that process they’re paid directly to the builder. If you are going to own a build, you’re going to have to be prepared to outlay, be reimbursed.