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Renovating or building your dream home?
If you're thinking of building your own home from scratch, it's a smart move to research your finance options before you enter into a building contract.
We provide loan solutions for buying land, building new homes, purchasing off-the-plan and house & land packages.
Securing a loan to build a home is a little different than buying an established house because often the land and building purchase will need to settle separately.
The application stage
To accommodate this, your lender will likely manage your initial loan as two separate but simultaneous applications - one for the land purchase and the second for the completed house and land cost.
The second application will eliminate the first loan and leave you with just one loan.
The construction stage
Most lenders will also require you to build on your land within two years of settlement - this does not mean you need to finish the home within the two year time frame, just that you need to start building within two years of settling on your land.
The construction of your home will generally be conducted in stages, with payments required at the end of each stage.
The repayment stage
The bank or lender only charges you on the amount of money you have drawn down, therefore your minimum repayment will vary depending on which stage your home has reached.
While most construction loans have a variable interest rate, there are some available that operate as fixed rate loans. If you do use a fixed rate construction loan, you may end up with one rate on your land loan and a second rate on your construction loan.
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