Construction loans are designed to help home buyers finance the construction of a new home or the renovation of an existing property.
These loans are typically different from traditional home loans, as they provide funds in stages throughout the construction process.
These loans can cover everything from the purchase of the land to the building materials, labour costs, and other expenses associated with construction.
Construction loans can be complex, however, so it’s important to work with a mortgage broker who has experience in this area. With the right advice and loan product, you can build the home of your dreams and create a property that’s tailored to your individual needs.
Unlike traditional home loans, constructions are paid down progressively i.e. the bank makes progress payments to your builder as the construction progresses:
1. BASE STAGE
2. FRAME STAGE
3. LOCK UP STAGE,
4. FIXING STAGE
5. COMPLETION STAGE
As the build progresses your repayments will increase.
One thing to note is that the majority of constructions loans are interest only until completion. Banks understand that you are probably paying rent, board, or another mortgage at the time of the build.
We love constructions loans & seeing your dreams turn into a reality!