Know about Construction loans Sydney:Loans & Mortgages
What are Construction loans in Sydney?
Loans and mortgage is here to help you get your finance sorted so you can build your home, or complete your renovations. The work from application to a small town is completely online, o'er the phone, and by email, but at every step of the way, you’ll peach to a real number person to help you through. Unlike regular home loans, construction loans are closed down in stages. At the completion of each stage of the build or renovation, we arrange an inspection and so yield the builder for that work. This means you aren’t gainful to the builder upfront for something you haven’t yet received
Below you will know how to find Construction loans Sydney:
How do construction loans work?
Step 1: We notify you and your builder when construction can start
The first
phase of construction should start right away. The funds wish to be available to
draw down for up to II years from the disclosure date on your construction loan
contract.
Step 2: Your builder begins construction in stages
There are typically five stages of construction, plus the deposit. Your builder will issue an invoice at each stage.
1. Deposit to the builder
2. Slab
3. Frame
4. Lock-up
5. Fitting
6. Completion
Step 3: We
make progress payments
As each
stage is completed, you’ll pass us the invoice from your builder and authorize
us to pay your builder using the funds from your loan. This means you’re only
ever paying for work that’s been completed.
We'll let you know when you need to authorize a progress payment.
Step 4: You make interest-only repayments
Until
construction is complete, you’ll only pay the interest on your loan. If you've
selected a direct debit repayment option, this will be debited monthly.
The interest
amount is calculated based on your loan’s interest rate and the owing balance
on your loan. Remember that your owing balance will increase every time we
release funds to pay one of your builder’s invoices, which means your interest
payments will increase throughout construction.
Step 5: We complete inspections and valuations at certain stages
We’ll
organize valuations with your builder to make sure everything is on track
during construction.
These are typically done:
At the assessment stage, before construction
At the slab
or base stage
Before the
final progress payment.
We can also
request additional valuations at any stage.
Step 6: Your builder completes the work, and the final payments are made
When
construction is finished, we’ll conduct a final valuation of the property to make
sure it’s been built as per the original plans and specifications.
We’ll also ask you to provide:
A copy of the insurance policy or Certificate of Currency for the building – make sure you put Bank West as the mortgagor of the property
Receipts of
any payments made to your builder.
We’ll then
make the final progress payment to the builder.
Step 7: You collect the keys to your new home
Make sure
you have a copy of all relevant warranties and certificates, and the builder’s
written authority that construction is done.
Congratulations on your new home!
Step 8: You make loan repayments for the duration of your contracted loan term
Conclusion:-
The significant difference between new construction loans and normal loans is that you only pay interest payments on the loan amount drawn down as you progress through the construction process.
If you pay cash for your land and then arrange a construction contract with your builder, they will ask for a progress payment upon the completion of a specific stage of the project. This invoice is sent to the lender and they will pay the builder. The lender will then send you an interest payment request. Various construction loans include house and land packages where the land loan is drawn and progress payments are made on construction. Some of these packages only require full payment upon completion, which can save thousands, as the builder incurs the interest cost on the construction.
For construction, a loan made the easy call on 040 380 3470 or email us now.
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