27 Aug Construction loans – A quick guide
One of the key steps in building a new home is securing approval – as thousands of Australians do each month. In June, a total of 13,237 homebuilding approvals were issued throughout the country. About 70% of these approvals were for houses; the rest were for apartments, townhouses and other dwellings.
If you’re planning to build a home, the first thing you should do – before designing your home and submitting your plans for approval – is speak to a broker. That way, you’ll discover how much you’ll be able to borrow and what repayment terms to expect.
Assuming your project goes ahead, you won’t receive your funds in a lump sum. Instead, you’ll receive the money in five tranches, as your project reaches different landmarks. At this stage, your loan will be interest-only, and you’ll be charged interest only on the funds you’ve received so far.
Once the project is completed, your construction loan will revert to a standard home loan and you’ll be charged both principal and interest. As a result, your monthly repayments will increase.
Contact Finestream with help guiding you in the process.