When you’re properly prepared, the approval process for a construction loan can be quick and easy.
Here’s a snapshot of the process and things you need to do:
1. Select a Registered Builder and arrange for a Fixed Price Building Contract.
2. See a lender for your construction loan.
3. Post-approval: applying for progress payments to access your funds.To ensure your loan application is as seamless as possible, simply follow the steps shown below.
Step 1:Selecting a builder.
Your lender will need to know about your builder to make sure your loan process is smooth and your funds are available when needed.
The details required also differ depending on whether you’ve chosen a Registered Builder or are completing the construction yourself.
For owner builders your lender will need:
• Copies of council certified approved plans/ specifications/permits/licences for owner builder construction works.
• Copy of Quantity Surveyor (QS) report detailing anticipated construction costs
• Detailed outline of full construction costs that includes Progressive Payment Schedule and contingency/overrun – this must be presented in a format acceptable to your lender.
• Copies of all quotations/invoices/estimates.
• Copy of soil test and Quantity Surveyor’s comments
.
• Detailed timing schedule
• Copies of insurance policies (required prior to first progress payment).
– Builders All Risk/Public Liability Insurance.
– Public Liability Insurance.
– For Northern Territory: Home Building Certification Fund (HBCF) Owner Builders Policy.
For Registered Builders your lender will need:
• Copy of signed Industry Standard Fixed Price Contract
• Copy of plans/specifications/permits.
• Copies of insurance policies (required prior to first progress payment):
– Builders All Risk/Public Liability Insurance.
– Domestic/Home Warranty Insurance.
– Public Liability Insurance.
For your lender to approve your application faster there are a few details they can’t do without:
• Your income.
• Your monthly expenses.
• Any assets you have, including properties, vehicles, investments and bank accounts.
• Financial liabilities like loans and credit cards (including store cards).
You may be required to provide supporting documentation to verify your details, so that the lender can assess your home loan application and determine if this loan is right for you
Need a construction loan?
Contact us @ propertyloans@realrenta.com and we will arrange for a lending specialist to contact you for a no obligation discuss
Jason Gwerder
Wednesday, 13 March 2019
