Getting a home loan can be quite a stressful and confusing part of the home building journey. The new build mortgage market is complex requiring expert knowledge and a specialist approach.
That’s why Allcastle Homes has partnered with leading mortgage specialists Mortgage Advice Bureau to provide some helpful tips to understand the finance process.
Financing for a new home build is different to the way you would finance an established home or a Complete New Home.
This type of mortgage loan is different to a standard home loan and it’s not as straightforward as it sometimes can involve two separate lending transactions.
For instance, if you are looking to purchase a House & Land package, you might require a loan for the land and a loan for the construction of the home.
If you already have land or you are looking to knock down and rebuild, you might only require the finance to assist with the construction of your new home. In this case, you will require a construction loan.
The construction loan has multiple progress payments, sometimes referred to as loan drawdowns, and typically follow six progress payment stages:
- Deposit
- Slab
- Frame
- Lock-up
- Fit-out
- Completion
Each payment is due at the completion of each stage of construction and you will be provided a schedule of when these payments are due in your building contract.
Important questions to ask when considering a construction loan
- What is my interest rate?
- Can I have a fixed interest rate while building?
- What are the loan establishment fees?
- Is an offset account available?
- How quickly can my Authority to Commence Construction (ACC) be issued?
- Will I pay progress payment fees?
- How long is my formal approval valid for?
- How much paperwork will be required?
- Does my lender offer bridging finance on
construction loans? - What are other lending costs apply?
If you are ready to start your Allcastle home building journey, speak to an Allcastle Homes consultant today on 1300 255 999
