Construction Loans

  • Construction Loans

Construction Loans: Building Or Renovating Your Dream Home

Construction loans work very differently to standard purchase or refinance loans and can confuse even experienced borrowers.

Don’t sign a building contract before you understand how the bank will fund it

The right structure can keep cash flow stable throughout the build.

Suggested Sections

  • How construction loans are structured
  • Progressive drawdowns at stages: slab, frame, lock-up, fit-out, completion.
  • Interest typically charged only on funds drawn.
  • Key documents lenders require
  • Fixed-price building contract.
  • Council-approved plans and specifications.
  • Evidence of land ownership or land contract.
  • Managing changes and variations
  • How variations can affect approvals and valuations.
  • Why a contingency buffer is essential.
  • Owner-builder vs using a licensed builder
  • Why many lenders are cautious with owner-builder structures.
  • Extra requirements for self-managed builds.
  • Tips to keep the build finance-friendly
  • Maintain savings buffers.
  • Avoid major new debts during construction.
  • Keep communication open with broker, builder and lender.