Construction Loan Process - A simple step by step guide
Construction Loan Process
I am dedicated to making the loan process as simple and quick as I can. I can guarantee to take care of you each step along the way.
Step 1: Book an appointment with me! I will listen to your financial goals and talk you through the loans process making sure you understand each step along the way.
Step 2: Select a builder. Look at builder recommendations, ask around. Check google reviews and ask in face book groups. Check qualifications and remember intuition is the key, if it’s too good to be true it usually is.
Step 3: Supply me with all your documentation. I will try keep this simple by providing you with a check list of what is is needed in our appointment. It is important you supply me with the land contract and land specifications build contract as well as the build contract and any quotes you have received. These documents will form your loan documents.
Step 4 : If there are any variations made to the build contract don’t forget to send these on to me. If there are any variations to your contract and these are supplied prior to the validation and loan approval, then they can form part of the loan. If additional valuations come after this, then the client needs to advise the broker, a this can affect the funds required and /or valuation.
Step 5: FHOG – First Home Owners Grant, or any other grants. If a grant is applicable to you, it needs to be completed so the funds can be used for construction.
Step 6: Complete Payment. If there are any shortfalls these will need to be paid by the client prior to the bank releasing funds for any progress payments. The lender will always ask for their contribution first.
Step 7: Progress Payment Request. Once construction has commenced clients will receive a progress payment request – this needs to be forwarded to me immediately so I can send it to the bank for fast payment to the builder. So lenders will have their own forms which will need to be signed and sent in addition to the request. The lender will then order a valuation and in some cases, then make the payment to the builder.
Step 8: Final Progress Payment. When you are nearing the end of your build you need to allow time for the final payment – this can take a little longer as the lender will need to organize for a final valuation on the property. For the final payment to be made a copy of Building Insurance as well as a certificate of Occupancy needs to be supplied. I will liaise with you and the builder to work out a handover date.
Step 9: MOVE IN! This is such an exciting time but remember to organize insurances we can also assist you with this. Oh, and electricity.
Step 10: Tine to plan your next project! I will keep in contact you with you throughout the life of the loan making sure you always have the best loan product for you! I am always ready to assist you with any finance needs.