We all have our dream home in mind – the one we’d build if we had the time and could find the right land. If you’re thinking of constructing your own home it’s a smart move to research your finance options before you enter into a building contract.
There’s a big difference between financing for a build and financing to buy an established home. When you engage a builder you agree to make progress payments – regular pre-planned installments during the build process. Until the final payment is paid to the builder, your lender will usually only charge interest on the amount of money paid to the builder (rather than the full loan amount you’ve been approved for).
Lenders approach construction loans differently. They’ll ask you questions like:
- Is your builder providing a fixed price contract?
- Are you considering being an ‘owner/builder’?
- Have you made provisions for extras and being over budget?
- What inspections will be made during the construction?
- What payments will be required by the builder at each stage?
At Loan Market we understand building a home can be stressful enough without worrying about organising finance. By matching your requirements to the right lender and the right loan, we make the finance part easy and stress free for you.
If you’re looking to build your own home don’t forget:
- First time buyer grants and concessions are often more generous if you’re building your first home, rather than buying an existing property.
- With a new build, stamp duty is generally only paid on the value of the land and not on the construction price of your new property.
Your Loan Market mortgage broker will talk you through the potential grants and stamp duty applicable in your own scenario.