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Let our consultants take care of your construction loan in Point Cook

Instead of buying an already established home, you may be thinking of constructing a home of your choice. It can be a wonderful and exciting thing to do but setting up a home can be pretty expensive. To help you with the construction process, a construction loan can provide you enough finance so that you can get a home you have always dreamed of.

“Consult a loan expert at Credit Hub and save yourself from the inconvenience of getting a construction loan.”

Advantages of construction loans

Saves Interest :
It helps you save interest because interest is applicable only on the amount drawdown, not on the maximum amount which bank or lender has agreed to pay. So, you pay less interest rate.

Lower Repayments :
During the construction period, loan repayments are interest only which means that you only need to pay interest only for the amount drawdown until the construction is complete. Therefore, loan repayments are lower.

Convenient :
Opposed to other loans where borrowers can only borrow money against the value of current land or property, construction loan allows borrowers to borrow money against the value of the property as if it were completed.

Protection :
Payments will not be made to the builder until the builder’s work is inspected and approved by the borrower.

How construction loans in Point Cook work

Construction loans are suitable for any borrower intending to build a new home on a vacant block of land. Here are the steps that you need to follow

Find the best offer for construction loans in Point Cook

Choose the best offer among various construction loan lenders in Point Cook as the interest rate may vary greatly from regular home loans.

Make sure you have a clean credit history

Make sure you have gone through the copy of your credit history before applying for a construction loan. A good credit record can increase your chances of getting a construction loan. Also, make sure that you are in a good financial position before applying for a construction loan.

Prepare your documents according to the construction stages

Construction loans take place in 5 stages and these are:

  • Foundation
  • Frame and Brickwork
  • Lock Up
  • Second Fix
  • Completion
  • You will be asked to present an estimation and specification of your construction plan to the lender before the loan process

Make your deposit

You can either deposit the money to the lender or you can show your land on which house is to be built. This land will act as a security for the bank or lender.

Distribution of fund to the builder

The payment is distributed to the builder according to progress stages. An inspection will be held after each construction stages to ensure that work is satisfactorily done. Once it is ensured that the work has completed for a specific stage, payment will be made to the builder. This thing protects the lender as well as you, ensuring the work has been done.

Approval from council

You will be required to show an occupancy certificate issued by the local council before the approval of the final payment of the construction loan. Your lender will not provide you fund until you provide them with the occupancy certificate. Occupancy certificates make sure that your property is fit to be in a residential area.

Insurance and policy

Never forget to ask your builder for a risks insurance policy. This should be done to protect your lender and yourself from any unpredicted damage.

Construction loan application checklist

Personal Identification:
Passport, birth certificate, driving license and a copy of marriage certificate if married.

Income:
Recent salary slips from the employer with the name of the company. In case, you are self-employed, personal and business tax returns of last two years, ATO assessments, and all income details will be required.

Additional documents

  • Signed building contract between borrower and a credible builder
  • Stamped document of building plans
  • Rent income statements
  • Copy of builder’s insurance policy
  • Centrelink letter confirming family tax benefits
  • Centrelink letter confirming permanent government pension
  • Proof of shared dividends
  • Evidence of any other regular income
  • Proof of ability to make extra repayments