A construction loan is a type of mortgage designed for people wanting to build a new home. Depending on your circumstances, you may be able to purchase your vacant block of land first and then arrange to build on the land. In some instances, this will be within a specific timeframe; however, in most cases, your construction will be subject on the completion of the new estate or land development and when the proposed land titles are registered with the local council.
In both scenarios, your AusLend Mortgage Adviser will have to consider the total amount you need to borrow when assessing your home loan options.
Construction loans aren’t set up in quite the same way as a standard mortgage; however, if you have purchased a titled land, you will be required to start making repayments on the land component upon settlement of the land. Your builder will then provide you with a break down of the full amount into separate payments called progress drawdown. These are percentages of the total building contract amount paid out of your mortgage funds to the builder throughout the construction process. While progress draws are being made, the majority of lenders will only expect you to pay the interest due on the amounts that have been drawn. Your full principal and interest payments won’t begin until after the handover has taken place and you have received the keys to your new home, meaning you save on interest during the construction process.
We complete all the necessary paperwork with you and negotiate with the lenders on your behalf. We also help you answer these important questions:
- How much deposit do I need?
- Do I choose my house before I secure the ideal land/block?
- Do I qualify for the government grant or concession?
- What are the pros and cons when building?
- Which lender is most suitable for me?
- Is the interest rate higher for construction loans?
To get the right advice on your construction loan.
Call +61 3 9111 5712 to be connected with an AusLend Mortgage Adviser in your local area or fill the form below.