Construction Loans
Loans and criteria for the construction of your home can be quite complexed so it pays to talk to us first. Banks prefer full priced contracts (referred to as “Turn Key” contracts) with no surprises. Banks will tend to factor in a contingency cost to your budget to build – normally 10%. This covers any cost overrun’s but this may also have a bearing on how banks perceive your ability to service the loan. |
As a general rule of thumb most lenders will be looking for you to provide a minimum 20% deposit for the entire project i.e. section costs and total build cost. The deposit requirement can vary from lender to lender and can also be dependent upon actual banking policies at any one time so seek the advice you need. Can I project manage the house build myself – the answer is yes but this may also depend on the experience you have in this field and/or the provision of a deposit in excess of 20%. Just because you’re completed home value may add up to more than what you have paid for it at the start, that doesn’t mean you will be able to provide a lesser deposit at the beginning.
The key is to talk with me first about what you plan to do and I can make sure that you have the construction finance covered before you sign to anything.
The key is to talk with me first about what you plan to do and I can make sure that you have the construction finance covered before you sign to anything.
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