Average Australian Mortgage Size in 2023
29 Nov 2023
Are you in the process of building a new home or completing major renovations? A construction loan gives you access to money progressively as different stages of the building construction process are completed.
Construction loans function differently from a standard home loan as they typically charge interest-only repayments throughout the building process.
The interest-only period ensures your repayments are kept at a minimum during construction before reverting to a standard mortgage post-completion.
To access funds in your construction loan, you’ll need to submit documents at each stage of the construction process, depending on the type of contract. To help take the guesswork out of what documents you may need to complete your new build, here’s a quick guide to the documents required to enhance with your construction loan.
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First things first, like any home loan in order to receive a construction loan, there are a number of standard documents that you will be required to provide.
In addition to your loan application documents, for a construction loan there are other specific documents required, most of which can be obtained from your builder. These are outlined below.
There are typically six stages to the construction loan process, with each requiring signed progress payment invoices before a portion of your loan gets released.
loans.com.au assesses the release of construction loan funds through six building stages:
For further information on these stages, see here.
It’s important to note once the final payment has been made, your construction loan is converted to a standard variable rate loan.
Please note, that this checklist may not cover all individual circumstances and scenarios and serves purely as a guide.
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