Building a new home...
Building your dream home is an exciting but challenging process and your borrowing capacity will shape both the location and type of home you can afford. House and land packages are generally less expensive per square metre but can be more limited in choice than an architect designed home.
Upon selecting a licensed builder they will provide you with
- A fixed price contract for the construction
- Council approved plans and specifications of the proposed residence
- A copy of builders insurance which must be current during construction
With a Construction loan, money is drawn down as per the building contract in a series of progress payments to the builder and closely follows a progress schedule requiring regular inspections by the lender.
- The value of your completed project will be initially estimated. This type of valuation is referred to as a TOC or total on completion valuation
- The valuer will also check the progress during construction to make sure the work has been completed as stated in the building contract and to approve the builders progress claims
- Once construction is completed, the valuer will confirm a final valuation of your property
Payments to the Builder
This is done by providing us with a copy of your builders invoice along with a request for funds at agreed intervals.
- The valuer will be asked to confirm the works stated
- The lender will approve the claim and pay the amount direct to your builder
Usually repayments are made on an interest only basis during the course of construction, reverting to principal and interest repayments when construction is completed.
