Construction Finance Exactly When You Need It
Building a new home or substantially renovating an existing one is an exciting time but it can also be very stressful. There are so many decisions to make! Our competitive construction loans let you focus on all these decisions, knowing your finance is available for a competitive rate, exactly when you need it.
Bluewell provides construction loans for people who are building a new house, knocking down an old one in order to build a new property, making major renovations to an existing home or buying land. Having the right loan structure in place before you make your move will ensure the process is smooth and hassle-free. This is where we can help.
The Bluewell team can advise you on the best loan for your needs. There are important differences between standard home loans and construction loans – we offer both types of loan so we can structure a finance solution that is tailor-made to your situation.
Our construction loans provide a range of features, including offset accounts, the ability to make additional and lump sum repayments, $0 upfront fees, $0 ongoing fees and most importantly – competitive interest rates.
Which Type Of Loan Is Right For You?
Lots of factors will influence which type of loan is most suited to your needs. The Bluewell team can talk you through some aspects to consider when you’re looking to finance construction. These include:
- How much equity you have in your existing home – you may be able to fund the construction of a new property or block of land by redrawing on this equity.
- Whether you are an owner-builder or planning to do some portion of the construction yourself – this can affect the type of finance you need to access.
- How you feel about paying interest – if you redraw on an existing loan, you’ll be paying interest from day one, even though you’re only using a portion of the additional loan for each stage of the build.
Give our friendly team a call on 1300 669 664 to find out more about which type of finance is best suited to your needs.
How Is A Construction Loan Different To A Home Loan?
The main difference between a standard home loan and a construction home loan is that construction home loans provide for a progressive draw-down of funds, as key stages of the build are met. Repayments are usually made at five stages:
- When the slab or base goes down;
- When the frame is complete;
- When the property is at lock up stage;
- When the fit-out is done; and
- When the build is complete – this includes plumbing, electrical, finishing touches and an overall clean
The main advantage of a construction loan is that interest and repayments are calculated on the amount you have drawn-down. For example, if you borrow $500,000 for the build, but have only used $300,000 by the third stage, interest is only charged on $300,000. This can represent a substantial saving if your build is a long term one or if it’s held up.
It’s important to be aware that most lenders will only release equity at each stage of the build after all the equity from the previous stage has been used.