Which Bank is Best for a Construction Loan?
When it comes to construction loan financing, it makes sense to consider a big bank. They provide stability, reliability, and a reputation. However, their guidelines are strict. They provide little to no wiggle room because policy rules their decisions. A handful of banks own 91% of the mortgages outstanding in Australia. This means that they have little to no tolerance for the additional risk. Non-bank lenders like Mortgage House, however, provide competitive loan terms and more flexibility.
Construction loans serve a specific purpose. Construction loans differ from mortgage choice loans. Mortgages receive backing from the Australian government. Instead, it poses a risk during the building process. Several moving parts can fall apart each step of the way. Some things are out of the control of the applicant.
Banks prefer to work with established clients on construction projects. They loosen their protocols a bit when it’s a residential home build. Nonetheless, there’s still a risk, especially if the applicant is a first-time homebuyer or builder.
To gain traction in construction loan financing, prepare for the application phase. It also helps to integrate potential delays into your plans to create a buffer.
Best Bank for Construction Loan Conclusion
All lenders are conservative when it comes to construction loan financing. The endeavour poses some risks, so the loan carries a higher interest rate. The best bank for this financing is the one that offers you the best loan terms. It doesn’t have to be a bank; it can be a non-bank lender like Mortgage House. To receive more information, contact our loan specialists.