“The document titled ‘Explanation on Financing your House and Land Package’ made the construction loan side of our build run smoothly. We were well prepared for what was expected of us due to this document which meant we avoided any delays or hold ups on the build. The document was short and covered everything that we needed to know which avoided any surprises.”
Greg Lee
Let us help you understand the ins and outs of construction loans in layman’s terms by reading our ‘Construction Loans Explained’ E-Book.
As you may be aware, a ‘Land & Construction Loan’ operates slightly different to a standard home loan.
Please note, it’s important to set up a direct debit to make the interest only repayments for the holding costs (i.e. interest that is charged each month during the construction phase) to come from your savings account.
Let us now assist you to understand the ins and outs of this type of funding and what your Lender needs at each important stage.
Simply, contact us now to obtain your FREE copy.
With a construction loan, your Lender will retain funds equal to 100% of the Fixed Price Building Contract, to ensure adequate funds are available to satisfactorily complete the construction of the dwelling.
Your mortgage contract for your ‘land & construct’ loan will contain more detailed provisions regarding, amongst other things, construction funding.
The housing industry uses the following percentages as a guide for each stage of construction. These percentages are of a general nature and cannot be applied to all situations:
| Stage | Percentage of contract price |
| Deposit | 5% |
| Slab/base | 10% |
| Frame | 15% |
| Lock up | 35% |
| Fixing | 25% |
| Practical completion | 10% |