19 Mar 2022

How Much Can I Borrow for a Construction Home Loan?

Construction Home Loan

An estimated 10% of homeowners build their houses annually in Australia. Some believe that they can by taking the home construction approach. In many cases, owner-builders complete their projects below home prices in the Australian housing market

Owner-builders who require a construction home loan must satisfy. For example, you must turn in your plans. Then, the loan disbursements occur in installments according to the plan’s milestones. 

When you set your budget and realise that you need financing to cover the costs of the project, it’s important to understand how much you can borrow.

Most lenders will finance 60% to 95% loan-to-value of a residential home construction project. The figures remain similar for commercial construction projects. The difference between the two is the amount lenders will lend. Most commercial projects have much higher costs. Therefore, lenders will finance in the millions-mark. For residential projects, well-qualified applicants can obtain up to one million.

In addition, lenders will ask owner-builders to provide a 20% deposit, collateral, or a combination of the two. Then, they discuss potential disbursement scenarios. 

Mortgage House is a non-bank lender that finances home construction projects. Our loan specialists have tools to efficiently evaluate all applications. They also explore the goals of the applicants, current financial situation, and possible loan terms.

Construction Home Loan Conclusion

The maximum amount an applicant can obtain for a construction home loan depends on their financial situation. It’s possible to qualify for a 95% loan-t0-value ratio. To explore your options, contact our loan specialists at Mortgage House today.

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