Know about Construction loans Sydney: Loans & Mortgages

Loans and mortgage is here to help you get your finance sorted so you can build your home, or complete your renovations. The work from application to a small town is completely online, o'er the phone, and by email, but at every step of the way, you’ll peach to a real number person to help you through. Unlike regular home loans, construction loans are closed down in stages. At the completion of each stage of the build or renovation, we arrange an inspection and so yield the builder for that work. This means you aren’t gainful to the builder upfront for something you haven’t yet received

In below you will know how to find Construction loans Sydney:

How do construction loans work?

Step 1: We notify you and your builder when construction can start

The first phase of construction should start right away. The funds wish to be available to draw down for up to II years from the disclosure date on your construction loan contract.

Step 2: Your builder begins construction in stages

There are typically five stages of construction, plus the deposit. Your builder will issue an invoice at each stage.

1. Deposit to the builder

2. Slab

3. Frame

4. Lock-up

5. Fitting

6. Completion

Step 3: We make progress payments

As each stage is completed, you’ll pass us the invoice from your builder and authorize us to pay your builder using the funds from your loan. This means you’re only ever paying for work that’s been completed.

We'll let you know when you need to authorize a progress payment.

Step 4: You make interest-only repayments

Until construction is complete, you’ll only pay the interest on your loan. If you've selected a direct debit repayment option, this will be debited monthly.

The interest amount is calculated based on your loan’s interest rate and the owing balance on your loan. Remember that your owing balance will increase every time we release funds to pay one of your builder’s invoices, which means your interest payments will increase throughout construction.

Step 5: We complete inspections and valuations at certain stages

We’ll organize valuations with your builder to make sure everything is on track during construction.

These are typically done:

At the assessment stage, before construction

At the slab or base stage

Before the final progress payment.

We can also request additional valuations at any stage.

Step 6: Your builder completes the work, and the final payments are made

When construction is finished, we’ll conduct a final valuation of the property to make sure it’s been built as per the original plans and specifications.

We’ll also ask you to provide:

A copy of the insurance policy or Certificate of Currency for the building – make sure you put Bank West as the mortgagor of the property

Receipts of any payments made to your builder.

We’ll then make the final progress payment to the builder.

Step 7: You collect the keys to your new home

Make sure you have a copy of all relevant warranties and certificates, and the builder’s written authority that construction is done.

Congratulations on your new home!

Step 8: You make loan repayments for the duration of your contracted loan term

Conclusion:-

After the final progress payment is made, you'll need to start making loan repayments. If you've chosen to pay interest only until fully drawn (IOUFD), you'll start repayments on both the principal (loan amount) and interest.

If you applied for a loan with an interest-only term, you will continue to pay interest for three or five years