Construction Loans
When constructing a new dwelling, building is generally completed in several stages. Rather than settle a loan for the entire cost of building the dwelling, the loan is drawn down in stages through progressive payments. The builder will issue you with approximately 5 invoices during the course of construction. As each claimed stage has been completed, you will authorise us to pay the builder. Prior to making a payment to the builder, we may inspect the property to ensure the works claimed are completed. How is the difference between the construction cost and my loan funded?
When your total building cost is greater than the amount of funds that the bank is holding in your building loan account, you will be required to use your own funds towards the cost of the building project. For example:
Total Building Cost……………………………….……….$150,000
Loan Amount………………………………………………$130,000
Difference………………………………………….……..…$20,000
This $20,000 difference is your contribution towards the construction costs and must be paid to the builder prior to us releasing any of the loan funds held for construction. You will not be able to pay this difference during construction or at the end of the construction as there must always be sufficient funds retained within the loan to fund completion of construction.
Read our article on 'Building or Renovating Your Home', by clicking here.
Iden Money Construction Loan product spec available here.
Make an appointment to see an Iden Money Loan Consultant.
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