Construction Loans

What is a Construction Loan?

A construction home loan is for those who are building their own home as opposed to purchasing an existing property. You may also apply for a construction home loan if you are intending on making major structural changes to your existing home.

A construction loan generally involves more paperwork and processes than a standard home loan due to the additional number of parties involved such as your builder, architect, council, surveyors and other contractors. Due to the additional steps involved in the construction home loan process, it is important that you partner with construction home loan specialists to help put your best application forward. Not all lenders will offer construction loans, and sometimes if they do, it can be a limited range. That’s why partnering with a MyFutureCapital finance expert who has access to a wide range of loans & lenders is recommended when trying to find the right construction loan.

What are Progress Payments

When taking out a construction loan, the loan payments will be disbursed in part progress payments as you reach each stage of your build. Banks set progress payments to ensure they are covered, and that your building is progressing as planned.

What do Progress Payments look like:

Standard Construction contracts usually have the below:

Stage 1:

Includes foundation / slab – 20%

Stage 2: Frames – 20%

Covers building the frame of your property including partial brickwork, roofing and windows

Stage 3: Lockup -

Covers the external walls, doors and windows so enable your home to be ‘locked up’

Stage 4: Fit out – 20%

Covers the plumbing, electrical, fixtures and fittings to be completed