Building a new home can be a complicated process. Getting a loan to cover the construction costs can often be even more complicated and involve many strict timeframes and guidelines.
At Time Home Loans, we can help you access the finance you’re after no matter if you’re building your family home or have an investment development underway. We are Brisbane based finance and mortgage brokers with a track record of success in obtaining construction finance for our clients.
The process of getting a construction loan
Before you rush ahead and seek to take out a construction loan, it helps for you to know what to expect. Here’s a step by step guide of what this process will look like as well as answers to some commonly asked questions. Having a team of professionals to support you throughout this journey will help ensure your success.
What you need to know about construction loans
Every lender treats construction in a different way. It is very important for you to understand the lender you deal with and how they approach loans for construction properties. If you’re an owner and occupier the process will be different to that for a property development investor for instance.
No matter your situation, you will need to work with multiple parties such as builders, contractors, lenders, solicitors, accountants, quantity surveyors and the council. At every stage of the build process you will be required to complete documentation, make deposits and submit paperwork. Needless to say, there’s a lot to manage.
Construction loans exist to help you manage the complexity of such a project so you can meet your obligations with the professionals working on the build. By working with Time Home Loans, you will have the added benefit of having a number of these headaches removed as we’ll take care of the financial side of things. We work with over 25 lenders and can help you find the right one for your needs.
We’ll not only help you apply for the finance you’re after but we’ll also make sure all the relevant paperwork is completed on time and we can help ensure communication flows smoothly between relevant parties. We specialise in making the complicated simple for you.
1. Have an experienced broker on your side
Make sure you work with a financial broker who has experience in negotiating new construction deals. Our team is qualified and we have years of experience in negotiating finance for new constructions.
2. Get your finances in order
As with any type of loan, taking a look at your credit score and getting your finances in order is essential. If you’re working with a Time Home Loans construction broker, we will ensure you have all the necessary paperwork ahead of time.
3. Seek pre-approval
Unlike standard home loans, construction loans can take a few weeks longer due to plans, specs and contracts that need to be reviewed before approval. Being pre-approved for a loan can really help speed up the process down the track.
4. Research builders and land to purchase
As soon as you know what you can afford, you’ll be ready to find a builder and some land to build on! Make sure you do thorough research as your choice of building method will influence the total cost of the construction.
5. Choose a builder and get a blueprint you love
Work with a builder who has a blueprint you love in the area you want to live in. Make sure that working with this builder is within your pre-approved lending limits. Once you’ve settled on a builder, you’ll need to secure a loan and you’ll need all of the following information:
- The builder’s work history, references and insurance
- The materials, specifications and blueprints
- A line-item budget
- A draw payment schedule
- A signed construction contract with clearly defined beginning and end dates
6. Apply for a construction loan
Once you have a proposal and the necessary documents, you can apply for the loan with your chosen lender. Depending on your situation, different lenders may be able to offer better terms. When taking out a construction loan, you may also need to consider how the lending institution handles future mortgage payments. Our team will ensure you access the best opportunities available to you.
7. Use the loan as your home is being built
Construction loans are paid in monthly increments to your builder based on how much work they have completed in the month. You’ll typically only pay interest on the amount you withdraw each month with the larger repayments being at the end of the process.
8. Enjoy your new home
At the end of the construction process, it’s time to enjoy your new home!
The Time Home Loans difference
Time Home Loans stand apart from other mortgage and construction brokers in Brisbane as we do our best to ensure a quick and smooth journey. Our 7-day finance terms enable people such as yourself to access funds much sooner than what is typically available.
Our Construction Finance Centre is designed for the purpose of guiding you to discover which lending institution is best equipped to support you in your building project. As different institutions have different requirements, our brokers will walk this journey alongside you. We’ll ensure that no matter which lender you choose, you’ll be well prepared to meet your obligations without any obstructions to accessing the construction finance you need.
There’s nothing worse than going into something of this magnitude blindfolded and being met with one surprise after another. If you’re seeking a construction loan in Brisbane and you want to make sure you are as prepared as can be, contact our team today to assess your best move forward.