If you are building your home here is the construction loan process from the bank’s point of view 🏦
When applying for a construction loan to build a home, your lender will need:
👉 A copy of the building contract/ tender and plans.
👉 Their valuer will then estimate the on-completion value of the property and assess your loan on the lesser of the land price plus cost of construction or the on-completion value.
Like any other home loan, the lender will send out a loan offer for you to sign and return once your loan is approved.
Before your builder is ready to begin receiving payments from the lender, documents such:
👉 As final council approved plans,
👉 Drawdown schedule and
👉 Insurance will need to be provided.
Each invoice will represent a stage of the building process and will require progress payments.
Typically this is sent after the completion of a milestone stage. For example:
👉 Stage 1 Deposit to the builder
👉 Stage 2 Base/ Slab
👉 Stage 3 Frame
👉 Stage 4 Lockup
👉 Stage 5 Fitout
👉 Stage 6 Completion 🏡
How do you request that the bank pay your builder directly?
• You will receive an invoice from the builder
• You’ll then complete and sign a drawdown request form (available from your lender).
• Return the signed drawdown form and the invoice from the builder, to the construction department of your lender
• The Lender may order a valuation to verify the work that has been completed to date.
• Within 5 working days, funds will be paid to your builder
• Repeat for each progress payment stage of the building process