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.
|