Construction Loans

Looking to build your dream home or build a new investment property?  Then you are in the market for a construction loan. 

A construction loan allows you to live or invest in an area as well as having the opportunity to build the home of your dreams.  The most exciting part of building your own home is that you get to chose all the features that you want.

By using the services of a professional mortgage broker will ensure that this process runs as smooth and simple as possible.  Your professional mortgage broker will assist you to find the right construction loan for your needs.

The Ins and Outs of a Construction Home Loan

There is a different process that lenders and Non-Bank lenders use for setting up Construction Loans than what occurs when obtaining a Home Loan for the purchase of an established property.

In the case of buying an established property the Bank or non bank lender will loan you an amount of money which allows you to complete the purchase, the only other thing to do is to move in upon settlement.

However, in the case of a construction loan, a number of progressive draw downs are generated by the bank or non bank lender, up to the total amount borrowed.  During this drawn down stage the loan will be interest only and will only convert to principle and interest once the loan is fully drawn.

As your home is being built, your builder will invoice the bank or non bank lender at each completed stage of construction.  At each stage of construction your loan will be progressively drawn down until the home has been completed by the builder.

In summary all work is finished, the Builder has now been fully paid, and the loan has been drawn down completely.

Now is the time to celebrate, as your home is complete! The next thing to do is to move in.

Feeling Confused! Or perhaps you think it is all too complicated!

Then you need not worry because using the services of a professional mortgage consultant will guide you through the process and answer any questions you may have.

House and Land Packages

You may find that you wish to purchase a house and land package which is the most simple and straight forward process when it comes to obtaining a construction loan.

 Alternatively you may wish to locate a suitable block of land to purchase followed by using a house design and builder of your choice.

In this case you will have the land settled first and then seek out the builder. Which also means that you may end up with two loans.

One loan for the land purchase, and another loan for the construction of the home.

The choice of either option is entirely yours, and at the end of the day, you need to do what works best for you.