Building your dream home in the beautiful Currumbin area is an exciting journey, but understanding construction loans can feel overwhelming. Whether you're planning a new build on suitable land or considering major home renovations, having the right financial support makes all the difference.
As your local renovation Mortgage Broker, Living Home Loans helps Currumbin residents access Construction Loan options from banks and lenders across Australia. Let's walk through everything you need to know about construction loans and how they can help bring your dream home to life.
What Makes Construction Loans Different?
Unlike traditional home loans, construction loans work on a progressive drawdown system. This means lenders only charge interest on the amount drawn down at each stage of construction, rather than the full loan amount from day one. This approach keeps your interest costs manageable during the building process.
The loan operates on interest-only repayment options during construction, with funds released in instalments as work progresses. Your registered builder submits progress payments based on completed construction milestones, and the lender releases funds accordingly.
Understanding Progressive Payment Schedules
Construction loans typically follow a Progressive Payment Schedule that aligns with various stages of the project:
• Land purchase and site preparation
• Foundation and frame completion
• Roof and lock-up stage
• Fixing stage (plumbers, electricians, and other trades)
• Practical completion
Each drawdown requires an inspection to verify work completion before funds are released to pay sub-contractors and suppliers.
Ready to get started?
Book a chat with a Finance & Mortgage Broker at Living Home Loans today.
Planning Your Construction Journey
Before applying for a loan, you'll need to make a plan that covers several key areas:
Location and Land
Currumbin offers an ideal location for building, but you'll need to consider council restrictions and council regulations. Some properties may require you to demolish existing property, while others offer vacant suitable land ready for building.
Budget and Contracts
Fixed price contracts provide certainty for both you and the lender. House & land packages can also offer a streamlined approach, particularly for first-time builders. Remember to factor in council plans, permits, and development application costs.
Timeline Considerations
Most lenders require you to commence building within a set period from the Disclosure Date, typically 12 months. This ensures your loan approval and interest rate remain current.
The Application Process
Applying for a loan involves providing detailed documentation about your project, including:
• Building contract and specifications
• Council approvals and permits
• 'As if complete' valuation
• Builder's credentials and insurance
• Your financial position
Lenders use an 'as if complete' valuation to determine the loan amount they'll approve. This valuation estimates your property's worth once construction is finished.
Managing Costs During Construction
Construction loans include various fees, including a Progressive Drawing Fee charged each time funds are released. Some items may be listed as Out of Contract Items not included in the building contract - factor these additional payments into your budget.
For major home renovations or buying off the plan, a home improvement loan might be more suitable than a full construction loan, depending on your project scope.
Making Your Dream Reality
Construction loans open doors to creating exactly the home you want in your chosen price range. Whether you're building from scratch or undertaking significant renovations, the right loan structure supports your vision while managing financial risk.
The streamlined application process we offer at Living Home Loans helps Currumbin residents understand their options and choose the right loan structure for their unique situation. We work with multiple lenders to find competitive interest rate options that suit your budget and timeline.
Building your dream home in Currumbin is an investment in your future. With proper planning, the right loan structure, and expert guidance, you can turn your vision into reality while maintaining financial confidence throughout the construction process.
Ready to explore your construction loan options? Call one of our team or book an appointment at a time that works for you. Let's discuss how we can help make your dream home a reality in beautiful Currumbin.
