Construction Loan Process
Simplified Construction Loan Process
- Signed & dated building contract
- Plans, tender and specifications
- Council approved plans
- Builders insurance
- Builders public liability insurance
- Receipts for any items you have already purchased that are not included in the building contract
- Quotes for any items you intend to purchase that are not included in the building contract
- Once the loan process has been completed, the progress payments will start according to the progress payment schedule included in the building contract. A commencement letter is usually sent direct to the builder before construction will begin.
- Each progress payment will have a stage, the deposit is usually the first stage followed by the slab and continuing the schedule until completion.
- After each stage is finished, it is recommended you view the work to ensure it has been completed to standard.
- All applicants must sign the builder’s invoice so that it can be sent to the lender, the lender will align this payment with the schedule and organise to pay the builder direct.
- After each progress payment or progressive drawdown, you will start paying interest only repayments on the balance of your loan, increasing each stage until completion.
- Once your construction has been completed, the lender will need to organise a final inspection to confirm all works are completed as per the building contract.
- Your repayments will revert to your original request once the loan is fully funded, if you required principle and interest or interest only, this will be done after construction is completed.