What is a Construction Loan?
It is a short-term, interim loan for financing the cost of constructing your new dream home. Lenders/credit providers will secure a mortgage over the real estate property you are financing, and they will make periodic payments to your builder at periodic intervals as the work progresses.
The key features of a Construction Loan are:
• It is typically a short-term solution with a maximum of one year
• The borrowers will be expected to pay Interest Only payments during the construction period
• Interest is only calculated against the portion of the loan amount that has been drawn down
• Construction must commence within 12 months of loan settlement
• Construction must be completed within 12 months of the first progress drawdown payment
• Upon completion of the building project, your loan will roll over into a standard Principal and Interest home loan
When are Progress Payments Drawn Down?
• For the purchase of the vacant land
• After the laying of the flooring
• After the installation of the roof (including the frames)
• At lock-up stage, and
• At the completion stage
Additional Documents for Processing a Construction Loan:
• Fixed Price Building Contract
• Council approved plans and specifications
Now that you have understood everything about contruction loan in detail, apply for the loan package and build your dream home.
Singh Finance employs professionally qualified finance experts who work very hard in finding you the best construction loan for your home. Call on 0424 190 908 or enquire online for quick loan approval.
For more information on Construction Loans for Building A New Home or Renovation, visit : http://www.singhfinance.com.au/residential-finance/construction-loans
Singh Finance Pty Ltd
P.O Box 4042
Parramatta NSW 2124
Ph: 0424 190 908
Fax No. 02 9608-6279
Australian Business Number: 78 154 555 843
Australian Credit License Number: 417408