Construction Loans Made Simple
Building a home is exciting, but construction finance works differently to a standard home loan. I'll guide you through every stage, from your building contract through to the final progress payment, so you know exactly what to expect.
Building a home involves more than choosing a builder. Before construction can begin, your lender needs to assess the land, your building contract, your contribution and the total funds required to complete the project.
Construction loans also work differently from standard home loans, with funds released in stages as your build progresses.
I'll help you understand the process before you commit, compare suitable lenders and make sure you're prepared for each stage of the build.
How I'll help you build with confidence
Construction finance works differently from a standard home loan. I'll help you understand the process, compare suitable lenders and make sure you're prepared for each stage. From getting your finance approved through to progress payments and completion.
Understand your finance
Construction loans work differently from standard home loans. I'll explain how progress payments work, when funds are released and what to expect throughout your build.
Compare suitable lenders
Construction policies vary between lenders. I'll compare suitable options based on your land, building contract, deposit and overall construction plans.
Prepare for each stage
I'll guide you from formal approval through slab, frame, roof, lock-up and completion, so you know what to expect at every stage.
Support through to completion
I'll work with you, your builder and your lender throughout the build, helping keep your finance moving smoothly through to completion.
Ready to start building?
Whether you're buying land, building your first home or upgrading to your forever home, I'd love to help you understand your options before you sign a building contract.
Frequently Asked Questions
Building a home comes with plenty of moving parts.
Here are answers to some of the ones I'm asked most often.
Question 1: How much deposit do I need for a construction loan?
The amount you need will depend on the total project, your available contribution, the lender and whether Lenders Mortgage Insurance applies. If you already own your land, the equity you have in it may also form part of your contribution.
Question 2: How do construction loan progress payments work?
Instead of receiving the full loan amount upfront, construction funds are released in stages as your build progresses. Your builder issues progress claims at agreed stages, and the lender releases funds once its requirements for that stage have been met.
Question 3: Do I need a building contract before I can get a construction loan?
You can start discussing your borrowing capacity and finance options before you have a building contract. However, you'll need your signed building contract and the required construction documents before the lender can complete its assessment and formally approve the construction finance.
Question 4: Do I make repayments on the whole construction loan while I'm building?
During construction, interest is calculated on the amount that has actually been drawn rather than the full approved construction loan. Your repayments therefore change as more funds are released throughout the build.
Question 5: What happens if my build costs more than expected?
Variations and unexpected costs can happen, but additional costs aren't automatically covered by your approved loan. It's important to understand how changes to your building contract could affect your finance before agreeing to them.
Question 6: Can I use the First Home Owner Grant towards my construction?
If you're eligible, the WA First Home Owner Grant may be available when building a new home. How and when it's applied can depend on your circumstances and the structure of your land and construction finance.
