Product/s
|
All
lenders on panel - Low doc option
available through most Owner
Builders are generally not permitted
- however exceptions apply
|
|
Loan Purpose
|
May be for owner occupation or investment
1 House & land
packages
2 Purchase of land with intention to build
3 Construction on land already held
4 Major renovations & improvements of structural nature to an existing dwelling
|
|
| Interest Rate |
As applicable to the selected
lenders home loan product
|
|
Land with
intention to build |
2 stages to application (you must show ability to service entire loan):
1. Vacant land loan – max LVR 90%
2. Construction application – max LVR 95% |
|
Documentation
|
You will need to provide the following in support of your application
1. Executed/draft Fixed Price & Time Building Contract
2. Council approved plans & specifications (or drafts)
3. Copy of builders licence and warranty insurance. |
|
Multiple Dwellings
|
Lenders
will generally allow construction of
2 - 4 dwellings under a residential
construction loan as long as one or
more dwellings will be retained for
owner occupation or investment.
Please enquire
|
|
| Maximum loan to valuation ratio (LVR) |
Refer to current guidelines for product chosen:
LVR based on lesser of on-completion valuation or land plus costs of construction. The value of any incentives offered needs to be deducted from valuation before calculating LVR, e.g. cash back, free legal & stamp duty, free cars/boats, free white goods, free landscaping. |
|
Timeframe
|
Construction must be completed within 12 months of starting
|
|
Repayments
|
During construction –
1 Variable interest only on amount drawn down
2 Interest accrued daily and paid monthly
in arrears
3 Repayments can only be made via direct debit
4 When complete, repayments can be P&I or IO
5 Extra repayments during construction phase cannot be redrawn until construction complete. Best to have separate split for construction – extra repayments can then be made to other split (& redraw accessed) |
|
Interest Rate
|
As per product selected. No loading/margin added during construction |
|
| Indicative Progress Payment Schedule |
Progress Payment
1
2
3
4
5 |
Stage
Foundation slab
Frame
External lining
Lock up
Completion |
% of Contract
15%
25%
25%
25%
10% |
|
|
Stages Valuations
Required at |
1st Progress Draw
2nd Progress Draw
3rd Progress Draw
4th Progress Draw
5th (Final) Progress Draw |
|
|
|
Fees
|
As per product chosen
Plus cost of each progress inspection valuation report |
|
| Formal approval & settlement |
Preferable that council approved plans/specs/signed building contract is received prior to form approval, however, some clients may prefer not to sign until finance is approved. In such cases, mortgage insurance acceptance can be obtained & formal approval proceed with solicitor advised of special conditions re settlement. |
|
Notes:
|
It is the applicant’s responsibility to ensure the builder’s licence & homeowner’s warranty insurance is current. |
