Construction Loans
Construction Loans
People apply for a construction loan when they are building a home or sometimes another real estate project. A construction loan (also known as a ‘self-build’ loan) covers the costs of the project.
MDM Finance offers construction loans for registered and owner builders and can navigate you through the conditions and challenges of building your home. Think of us as a member of your construction team!
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How A Construction Loan Works
Unlike a home mortgage, you don’t receive the full amount of the loan at once. A construction loan is designed as a progressive drawdown; that is, you receive instalments of the loan amount when you need them at the different stages of construction.
You generally only pay interest on the amount that is drawn down, instead of on the whole loan amount. Once the construction is over, the loan amount becomes due and/or is converted to a normal mortgage.
When applying for a construction loan, you will need Council-approved plans and specs, a signed and dated building contract (including the building stages and schedule of payments) and applicable variations and quotes.
You may also need a quantity surveyor. Before settlement, you will need to provide Builders Risk Insurance and a copy of your builder’s Public Liability Insurance.
When To Expect Your Construction Loan Instalments
Here are the usual stages when you can expect to draw down on your construction loan.
Slab down or base
Frame stage
Lockup
Fitout or fixing
Completion
Loans That MDM Offers
MDM Financial Solutions is a specialist finance broker with experience in the following loan types:
Development Loan
