Loans and criteria for construction loans can be quite complex so it pays to talk to us first to discuss your plans before you commit to anything with a builder.
Banks prefer full priced contracts and “turn key” contracts with no surprises. If you are looking at a kit set home then you need to ensure you have costing arranged for the entire project. It pays to factor in a contingency plan into the budget of at least 10%. Some banks will factor in a buffer for the servicing calculation, thus affecting your borrowing capacity slightly.
For most banks and lenders you will need 5-20% minimum deposit for the entire project ie section cost and total build cost. Just because your home may value up more than what you have pay for it at the start, that doesn’t mean you will get away with less deposit at the beginning.
Capitalising interest (adding interest payments to the loan) during the loan may also be available depending on your loan to value ratio.
If you are thinking about relocating a home onto a section you need to treat this process with caution before you commit to anything. Banks will generally only start to provide funding when the Code of Compliance is issued, the building is in place with access and all services hooked up.
When getting a build quote make sure you go through each room with a fine tooth comb getting exact specs for everything down to the finer details such as taps, skirting, interior door types, door handles, light shades, height of fencing etc.
The key is to talk with us first about what you plan to do and we can make sure that you have the construction finance covered before you sign up to anything.
No Proof of Income / Spec Builds / Self-Managed
If you are planning a build with no proof of income or looking to manage the process yourself, we do have options available. As a guide you will need 20-35% equity/deposit to put into the deal.
For more information or to discuss your options please contact us