Residential Construction Loans in Australia

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We are the choice of Australians for their residential construction loans, finance and funding. For many Australians, buying a home isn’t enough – they want to build their dream home. You may be thinking about getting a residential construction loan if you are one of these Australians. Being hands-on in constructing your dream home may seem exciting, but the financial side is quite complicated, especially for first-timers. Getting a construction loan in Australia can be tricky, which is why it is crucial for you to educate yourself properly about this type of financial product. Get low doc residential construction loan in Melbourne, Perth, Sydney, Brisbane, Adelaide, Darwin, and all across Australia. Are you look to get fast home construction finance? We are here to server you. Contact us by filling our form or call us direct at 0439462664 for more information. Get residential construction funding with no doc and no credit checks. Fast guaranteed approval. Low rates. 2.89% PA.

If you apply for a loan, your lender will require a fixed-price contract detailing when each stage is expected to complete and how much is due. Your builder will need to provide you with an invoice as the work progresses. The funds will be released after you sign a drawdown request.

What is a Residential Construction Loan?

The residential construction loan is a type of home loan designed to assist those who are building a house from scratch. This process is not the same as a regular home loan, which can only be used to buy an established home. A residential construction loan covers the costs you incur as you build a house.

The structure of construction loans is entirely different from the structure of a typical mortgage. You will not receive the amount you estimate your home will cost in a lump sum if you use a construction loan – instead, you will receive portions of your loan as drawdowns or progress payments.

You must, however, put up a deposit to cover the initial cost of the materials. A down payment of 5% of the total building cost is typically required by a lender.

 

How Does Residential Construction Loans Work in Australia?

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Your lender will be able to make payments to your builder during every stage of construction after your residential construction loan is approved. Upon completion of each phase, your lender will require an invoice from your builder before it can issue a payment. In addition to dividing the expected costs into various segments, your builder will outline the total amount needed to construct your home. In most cases, lenders will send someone to check on the progress of construction before releasing the next payment to the builder. You will benefit from this move since it ensures the quality of your future home.

Advantages of Residential Construction Finance

People who are building a new house can apply for residential construction finance. Their main difference is that they are progressive. A lender makes money available to the builder in instalments rather than fronting the entire loan upfront. The interest is then calculated based only on the funds you have received so far.

During construction, some lenders also offer interest-only loans. After you move in and the house is built, you start paying off the principal.

If you have been approved for a $500,000 loan but have only paid the builder $300,000 so far, you only pay interest on $200,000. You will make principal and interest payments on a total of $500,000. At that time, you won’t have to pay rent or a mortgage on your previous home.

The builder receives progress payments on residential construction funding. Typically, they are paid in stages:

  1. Base Stage. Setting up your foundation, including ground-levelling, drainage system and sealing.
  2. Frame stage.  Setting up guttering, roofing, window panes and some brickwork.
  3. Lockup Stage. Erecting external walls, windows, doors is when your house is finished to the point where it can be locked and left secure.
  4. Fit-out Stage.  Building interior accessories and fixtures, including plumbing, electricity, cupboards and benches, flooring and other joinery.
  5. Completion stage.  Final payment to builder and contractors, like painters, a final clean and any further details needed.

Residential construction loans allow you to make payments as each stage of the construction process is underway instead of fronting the entire loan upfront.

Need a residential construction funding?

Interested in our no doc residential construction fudning? Fill our form and we will contact you right away.

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