Construction Loan June 23, 2015
A lot of our clients chose to purchase a block of land and build their dream home, as opposed to purchasing an established property.
This way, our clients get the exact home that they want.
Construction loans are more involved than loans to purchase established homes, but let Better Choice take the hassle out of it for you.
More often than not, initially you will have two loans, i.e. one loan for the land and one loan to construct the home.
On completion of the home, if you desire, the two loans can be consolidated into one loan. During the construction phase, the lender will control the release of funds to the builder. That is, at each stage, (usually 4-5) when the builder requires payment, the invoice will be sent to the bank for payment. The bank will seek the borrowers authorisation before payment.
As the construction loan is drawn down in stages, you, the borrower, only pay interest on what is outstanding.
In the main, construction loans are only available on a variable rate.
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