What is a construction home loan?
A construction home loan is available for the sole purpose of constructing a dwelling on a parcel of land as compared to traditional home loans which can be used for a number of purposes.
This product is structured in a different way during the construction process and then reverts to a standard home loan once construction is complete.
During the construction phase there are generally up to 5 progress payments made and these progress payments are performed at slab stage, frame stage and so on.
There are inspections during the process and this is where the lending institution ensures that the construction progress is running to schedule and is built to the specifications required by council before they provide additional funding from the construction home loan.
There are a variety of construction home loans available to you and we have highlighted some of these options below for you.
You can also contact us and speak to one of our consutlants who will assist.
Construction Home Loans - Key Benefits
Choosing to construct a home rather than purchase an existing one is a personal choice and there are a number of construction home loans you can choose from to help you achieve this goal.
Let's have a look at some of the benefits of choosing to build your own home:
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You choose the type of home and the additions you want so it ends up just the way you want it to be |
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You choose the exact parcel of land you want to build on so the location and aspect of your home is in your hands |
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You have the satisfaction of knowing that your home is brand new and the no-one else has lived there |
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You save on stamp duty as you only pay stamp duty on the land component |
As you can see there are some personal reasons behind constructing your home as well as the potential to save from a stamp duty perspective as well.
Contact us and see which construction home loan may suit your needs best.
Standard Variable Construction Home Loans
Standard variable construction home loans simply have an interest rate which can fluctuate depending on market conditions.
During the construction phase there is generally a loading applied to the interest rate.
This interest rate loading is around the 0.25% mark and once construction is complete the home loan interest rate reverts to the standard variable rate.
Why not contact us to find out what home loan interest rates are available.
Fixed Interest Rate Construction Home Loans
When it comes to fixed interest rate loans there are a number of construction home loans and interest rates on offer.
The fixed interest rate will take effect from the time that construction is complete so during the construction phase the standard variable interest rate applies including the home loan interest rate loading as mentioned in the section above.
Simply contact us to find out about the fixed home loan interest rates available.
Full Doc Construction Home Loans
Construction home loans are offered to a variety of applicants and the most common type is a full doc.
This simply means that the applicant is able to provide evidence of income by way of pay slips, tax returns and or tax assessment notices.
Full doc products tend to provide a more competitive home loan interest rate as the lending institution is able to verify income, in addition to this the lending limits can also be greater and there is more flexibility in the location of where you want to construct.
Contact us and chat to one of our consultants who will be happy to assist.
Lo Doc Construction Home Loans
A lo doc construction home loan is a product which does not require you to provide evidence of income by traditional means.
Instead the lending institution requires an income declaration signed where you state your income.
This declaration on is used by the lending institution to assess your ability to repay the proposed home loan.
Lo doc construction home loans are designed for use by self employed applicants who may be unable to produce proof of income at the time of application.
To find out more about your options simply contact us and one of our consultants will assist.
100% Construction Home Loans
Due to the popularity of constructing a home there is a construction home loan provider who is able to offer a 100% No deposit construction home loan.
What this means is that the price of the land and the construction cost can by fully funded within the loan so your out of pocket expenses are minimised.
Only full doc applicants are able to obtain this type of product it has proven to be very popular with first home owners wanting to construct a home.
So if you have limited savings and want to build your own home the 100% construction home loan is the way to go. With competitive interest rates the 100% construction home loan is a great choice.
To find out more about this product just contact us and one of our consultants will assist.
Which Construction Home Loan is for me?
As you can see there are a number of construction home loans available, more so there are differing products to suit your individual circumstances and whether you're self-employed, don't have a deposit or are a first home owner there is a construction home loan which is sure to suit your needs.
If you're interested in building your own home then contact us and one of our consultants will highlight your options based on your needs.
What do I do next to get my Construction Home Loan?
The next step in obtaining a construction home loan is to contact us and speak to a who will listen and understand your needs and work with you to get you the most suitable product for your needs.
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