Construction: What Home Loan Product Do I Pick from My Trusted Mortgage Provider
Home loans for construction projects differ from mortgages for existing residential property purchases. Characteristics of this financing include:
- Short term loan period
- Only pay interest on the outstanding amount
- Incurs progress payments
In addition, applicants must satisfy a set of requirements. For example, owner-builders and investors must submit their building plans. Lenders must assess the market before funding these projects. Plus, they consider whether or not property already exists on the land. Then, lenders take into account if the applicant owns the land outright.
Since it takes six to 12 months to build a home in Australia, the loan to finance the project has the same length. Lenders do not disperse the entire amount in one lump sum. Instead, they set milestone payment disbursements.
Mortgage House is among the non-bank lenders that issue loans for construction projects. Some options include:
- Advantage 2 Years Fixed Investment
- Advantage 3 Years Fixed
- Advantage 3 Years Fixed Investment Special
Mortgage House takes pride in offering innovative loan products to fund these projects for owner-builders and investors. We also keep the process transparent. When a property doesn’t exist on a piece of land, it’s a risk for lenders. Banks remain conservative in their lending practices. Therefore, they fund a lower loan-to-value ratio such as 50%. In some cases, Mortgage House keeps the LVR low too.
The good news is that our loan specialists have the tools to find the most competitive loan terms. We also offer our mortgage calculator online for free.
Construction Mortgage Options Conclusion
To obtain financing for a construction project, contact the loan specialists at Mortgage House. Our team will outline the details of the loan project and the requirements.