Construction loans work differently to a normal home loan. I compare 50+ lenders, explain how progress payments work and help you line up your finance with your builder.
Lenders release money to your builder as each stage of the build is finished. Getting the paperwork and timing right avoids delays and surprises.
Money is paid to the builder in stages as work is completed, so you generally only pay interest on what has been drawn so far.
Lenders need the right contract, plans, specifications and insurance before they approve. I help you get these lined up early.
Variations, upgrades and costs outside the contract can add up. We plan for them so the build is not held up.
A plain-English overview of building with a construction loan in Queensland.
A typical build is paid in stages, such as the deposit, base or slab, frame, lock-up, fixing and completion. When your builder finishes a stage, they send an invoice, the lender may inspect the work, and the payment is released.
During the build you generally pay interest only on the amount drawn so far. Once the build is finished, the loan usually switches to normal repayments.
Most lenders want a signed building contract (usually fixed price), council-approved plans and specifications, and proof of the builder's insurance. In Queensland that includes QBCC Home Warranty Insurance for most residential building work.
The lender will also value the property "as if complete", which affects how much you can borrow.
With a house and land package you might settle the land first and then start the build, or the two may run together. If you already own the land, its value can count towards your deposit.
Knock-down rebuilds and major renovations can also be funded with a construction loan, but lenders look at them more closely, so it pays to talk early.
Some government help is aimed at new homes, including the Queensland First Home Owner Grant. I cover the current schemes and grants on my first home buyer page.
A pre-approval before you sign with a builder helps you set a realistic budget.
We talk about your plans, budget and builder, and I explain how a construction loan would work for you.
I look across 50+ lenders for construction policy that suits your build and your situation.
I gather your building contract, plans and documents and manage the application with the lender.
I help with progress payment questions along the way and stay with you through to completion.
Have a free, no-obligation chat before you sign with your builder.