Our construction loan approval process

Our construction loan approval process
Building a home is one of the most daunting but ultimately satisfying things that a person can undertake.
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Getting finance to build a house is also more complicated because at the start of the process you don’t have a house to use as security for the loan. Thankfully, there is a solution called the Construction Loan.

Construction loans differ from regular loans because they are drawn down in stages. As each stage of your home build is completed, we arrange an inspection and then pay the house builder for that work.

This protects you, the buyer, because you are not extending credit to the builder by paying upfront for something you haven’t received and it protects us, the lender at the same time. That means we are working together to make sure you get what you pay for.

Construction loans can sound confusing but they really aren’t that complicated, in fact, the way they work is commonsense. Below, we have outlined the process of building a home using a Construction loan from loans.com.au, all the way from applying for the loan, to collecting the keys to your finished home.

Loan process when building a house

Step 1: Application

Lodge an application online at loans.com.au


Arrange a call with a lender through our online booking form

Step 2:  Talk with a Lender

Talk with one of our lending managers. They will help you choose the most appropriate loan for your needs, determine what size of loan you could afford to service, and arrange a conditional-approval. If you haven’t filled out an application yet, our lender will fill it out while talking with you and submit it on your behalf.

Step 3: Upload Documents

You upload your supporting loan documents to onTrack, our easy to use online portal and synchronised mobile app. OnTrack is a groundbreaking system that lets you complete your home loan application entirely on your mobile device or computer from initial contact through to settlement and registration for online services.

You will need:

  • two pay slips
  • three months of statements for your salary account
  • evidence that you have your deposit
  • A contract of sale for the land (or proof that you own it)
  • a fixed price building contract from a registered builder

We will then contact your builder and arrange a property valuation.

Step 4: Final Approval

At this Stage you will receive through onTrack:

  • Final Approval of your loan
  • Your Mortgage documents and Loan Agreement pack

Step 6: Settle the land

If you don’t already own the land, we will fund its acquisition from the vendor.

Step 7: Fund Construction

Now we start to pay for each stage as it is completed. As each stage is finished, we arrange a progressive inspection and then, if everything is in order, we pay the builder directly.

The stages of a construction loan are:


Typical Components


Paid to the builder to commence work


Concrete slab complete or footings and base brickwork complete


House frame complete and approved by inspector


Windows/doors, roofing, brickwork, insulation


Plaster, kitchen cupboards, appliances, bathroom, toilet, laundry fittings/tiling, heating, fixing/internal doors, etc., plumbing, electrical, painting

Practical Completion

Fencing, site clean-up, final payment to builder

Step 8: Move in

When the home is completed, you will receive an Occupancy Permit from the local council to say that you are allowed to live in it. Congratulations! You now own a completed home! It is time to collect the keys and move in, or find a tenant if it is an investment property.

Step 9: Maintain your loan

Once your home is complete and the final payment is made, your home loan will now revert to an Offset variable loan. You may order a visa debit card if you wish to have one linked to your offset account.

Tags: building a home | construction loan

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