No pressure or anything, but this is the biggest (and most heart-wrenching) investment you’re likely to make. Whether you build or buy, there are pitfalls.
But when you are building, you need a different type of loan and a game plan that’s as water-tight as your bathroom sealant. The same applies if your dream starts off in the state of a renovator’s delight!
So, what’s the construction loan game plan?
Possibly the most obvious difference between a construction loan and a standard home loan is that you can break up the drawdown of the loan into five progressive draws – so it’s kind of like taking a full, 80-minute game of rugby league or a 60-minute game of netball with no breaks, and breaking it into five stanzas or periods.
The drawdown loan stages are usually based around:
- Deposit
- Base Stage
- Frame Stage
- Enclosed Stage
- Fixing Stage (roof)
- Practical Completion (lock up)
Your Mortgage Coach can step you through the process and make sure your loan reflects exactly when the loan needs to be drawn down and at what stage. Then, when the construction is game over, the team can give you all the information you need to decide on what loan product you revert to from there on.
What does Your Mortgage Coach need from you before applying?
Like every game, you need to make sure you’ve got your kit together. So make sure you have the following bits and pieces with you when you come in for a chat:
- Plans & specifications
- A fixed price contract from a registered builder
- Council approval
If you are ready to venture down the construction loan path, so you can build your dream home, we reckon that is an idea well worth backing! Your Mortgage Coach is here to help where we can and with our great network of lenders we will do whatever we can to get you in the game and off to a flying start!
