You are here: >> Homepage >> Honeymoon Loans, Cheap Home Loans

Residential Construction Loans, Owner Builders

Most of the lenders we work with offer a wide range of construction loans with interest rates and loan features similar to regular home loans. This type of loan can finance up to 100% of hard costs or up to 80% of the finished home value. Whereas the purchase of an existing property needs to be paid for up-front, a construction loan is received in stages.

Firstly money is lent to cover the purchase cost of land. Then money is paid to the builder to commence work, and as construction progresses, further instalments are advanced to cover materials and labour.

Lenders will require an inspection to be conducted by their representative at the completion of each construction stage before funds are advanced.

Because funds are advanced in stages, interest is only calculated on the sum advanced at any given stage of the process – not the full amount to be borrowed.

Additional fees and charges generally apply to cover the costs of building inspections by the lender. Generally lenders are reluctant to accept building applications from ‘owner builders’. In most cases, a fixed period and fixed amount building contract from a registered builder, would be required by the lender.