Home Loans

What is Home Loan?

If you are looking at building a new home or if you are undertaking major renovations, then a construction home loan is designed for you. A construction home loan is structured differently to a normal home loan in that it generally allows you to receive instalments of the loan amounts at various stages of construction. As they are progressively drawn down this means that you usually only pay interest on the amount that is used so far rather than the whole loan amount. Often lenders will offer construction loans that are interest only during the construction period and then will later revert to a standard principal and interest loan.

Progress Payments and How Do They Work?

Once your construction loan has been approved and you are building a property your lender will begin making progress payments. Progress payments are typically paid directly to the builder at each of the following stages of construction; slab down or base, frame stage, lockup, fit-out or fixing and completion or whatever the stages are set out in the builder’s contract.