Construction loans Brisbane

Most of the major banks and lenders will be able to help you out with a construction loan for your new home in Brisbane. However, not all smaller and online lenders will offer it. As these types of loans are more time-consuming and riskier than a regular home loan, some banks and lenders don’t want to be a part of them.

Generally, after settlement, the lender will use a specialised team to process the progress payments and keep an eye on the builder to ensure they are completing their work. In some cases, a bank could be slow at processing payments, which can delay things.

Due to this, you need to ensure you are getting the right lender for the construction of your Brisbane home. Your mortgage broker will have experience with construction loans and will understand which lenders work best in Brisbane.

The best thing about a mortgage broker is that you don’t need to pay anything for their service. Instead, they get paid a commission by the banks.

The work a mortgage broker does in securing your loan is similar to what a branch manager would do in putting together an application. So, the banks pay the mortgage broker for providing that service.

The best part about a mortgage broker is that they aren’t tied to one bank. That means that they can find the best loan for your financial situation from a wide variety of banks. They then get paid by the bank that you ultimately decide to go with. Plus if the application fails, then they don’t get paid.

It is possible to have your bank provide progress payments to the builder. These will occur when the builder has completed different phases of construction. You should discuss this with your mortgage broker when looking at construction loans.

Generally, the process works like this: You complete a drawdown request form and sign it. This, plus the invoice will then be sent to your bank for processing with the construction department. From there the bank may seek valuation to verify the work. Once approved, they release the requested payment to the builder.

Sometimes, your bank may require an independent valuation of different stages of the construction. This is to ensure work has been completed as expected and to the standard set by the lender. The next payment from your construction loan will only be released to the builder after this independent valuation has been conducted.

Your mortgage broker will take you through the specifics you need for your construction loan in order to get your home in Brisbane built as easily as possible. There are many documents which you will need for both a ready-built, or new construction loan, such as, your latest payslips, a few months' savings statement, and standard supporting documents. Extra things required for a construction loan in Brisbane includes:

• A building contract. This contains the construction stages, progress payment schedules, the build time, and the overall cost. In Queensland, you do not need to sign the building contract to get approval on your construction loan.
• Building plans. This will give an idea of the layout and size of your home to the valuer. It does not need to be council-approved plans.
• This helps with determining the final valuation of the property. The specifications let the bank know what finishes will be used, and the quality of materials.
• Extra quotes. If there are any other things being installed in the home, like pools, landscaping, or solar panels, the bank requires the quotes. This is because it will likely alter the value of the home.

When constructing a home in Brisbane there are usually 5 stages in which progress payments are released. It is possible that the lender will require an independent valuation at each stage of the construction. These 5 stages are: Slab poured, Frame up, completion of brickwork, lock up, and practical completion. The progress payment schedule could look something like this:

• Deposit 5%
• Slabs poured 15%
• Frame up 20%
• Completion of brickwork 25%
• Lock up 20%
• Practical completion 15%