Do Banks Give Construction Loans?
In Australia, the major banks hold the majority of mortgages. They also issue other types of loans including construction. Banks have a different set of responsibilities than non-bank lenders such as Mortgage House. Since they accept deposits from clients and maintain savings accounts, banks must maintain a certain level of liquidity. Therefore, banks must practice care when they fund construction loans for clients.
Banks do not have the freedom to deviate from their parameters for construction loans. Thus, they remain strict and continue using conservative lending practices.
Mortgage House sits on a different side of the lending scale. We have the freedom to issue loans that carry more risk. Our clients include home buyers, owner-builders, and investors. Construction projects have a higher degree of risk than family home purchases. Those that request a construction loan submit plans to build a home or multi-unit structure. However, no guarantee that the project will come under budget or complete on time exists. Sometimes, owner-builders require additional funds. Others need more time.
Nonetheless, Mortgage House competes with banks for owner-builders. We offer loan terms along the lines of banks for well-qualified applicants. Our loan specialists can also find competitive loan terms for those who have some blemishes on their credit reports. Once you apply, we start the process and discuss home loan rates.
Construction Loans and Banks Conclusion
The big banks in Australia hold the bulk of mortgages. Thus, they issue construction loans too. To check out how Mortgage House loan terms compete with those offered by banks, contact our loan specialists today.