Building a home requires a special type of loan.
Just as moving into an existing home is simpler than creating one from scratch, a construction loan has more processes and complexities than a standard mortgage, Never fear, the experts are here to handle it for you. We can ensure a seamless process from the dream to the dream home.
First you work out what it’s all going to cost: the land, the materials, the labour, the stamp duty, deposit and legal fees. Then it’s time to get the deposit together and contact your Loan Market broker.
Four things to know about the characteristics of construction loans:
- You’ll often hear progress payments referred to as “drawdowns”
- You’ll only pay interest on the amount drawn down to date. So, if you had a $1m loan, and the first drawdown was $250,000 you’d only pay interest on the $250,000 initially.
- Loan repayments are also interest-only during the construction period
- At the end of the construction process your loan can either revert to principal and interest
Planning on building a castle your way? The sooner you speak to a broker, the smoother the journey.