Home News Construction loans

Construction loans

Font size :
Q. Trying to buy an investment property in the CBD area has become extremely hard. We are thinking about moving towards more regional areas, but are there any significant risks in doing so?

A. When constructing a new home or completing a major renovation on an already built home, your finance needs will be a little different in the initial stages. A construction loan is a specialised finance option for building or major renovations which is designed for the building process.

With a regular purchase, the lender will put in the loan amount at settlement, however, with a construction loan, progress payments are made by the lender periodically throughout the construction stages. Most lenders will organise to have the property checked and valued after each stage has been completed to ensure it is at an acceptable standard and the work for the stage has been completed before they issue the next payment. This protects you and the lender if the builder is not completing each stage as set out in the contract.
One of the positives about using a construction loan is that repayments are usually interest only during the construction phase. This can help reduce the stress most people experience when building their own home.

Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork – plus there is no charge for this service. Get help from a local mortgage broker

Mortgage News and Articles

Many millennials are relying on an inheritance to buy homes Many millennials are relying on an inheritance to buy homes

Lawyers are seeing cases where disputes over inheritance have created tensions within families Read more

Gen Y homeowners fearful of interest rate rises Gen Y homeowners fearful of interest rate rises Many are worried rising interest rates will negatively impact their cost of living expenses, according to a new survey ... Read more

Young Sydneysiders are less keen on homeownership Young Sydneysiders are less keen on homeownership Many would rather ‘rentvest’ than be tied down to a costly owner-occupier mortgage, according to new studies ... Read more

New social housing aims to transform Ivanhoe Estate New social housing aims to transform Ivanhoe Estate The sprawling redevelopment aims to boost the supply of affordable housing in Sydney ... Read more

More mortgage news and articles

Sponsored Links

Thursday, Aug 24, 2017
Top Featured Rates
Top Bank Rates

Get help choosing the right home loan

Let us help you find the right home loan for your needs.

Tell us a bit about your circumstances:
  • Purpose of mortgage
  • Household Income
    $
  • How much do you want to borrow?
    $
  • How much deposit do you have?
    $
  • How much is your house worth?
    $
  • How much do you still owe on your mortgage?
    $
  • What type of mortgage do you have?


  • How much is your new home?
    $
  • How much do you want to borrow?
    $
  • How soon do you want a mortgage?
Next
  • First name
  • Last name
  • Where do you live?
  • Phone number

Special Offers

Related Keywords