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Absolut Financial
Construction Loans
Are you looking to source a loan for an upcoming construction project? Let the experts at Absolut find a construction loan to suit your needs. We’ll guide you every step of the way.
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Construction Loans in Melbourne: Progress Payments and Lender Checks
Flexible Payment Schedule
Progress payments aligned with the construction schedule.
Security
Construction loans are usually secured by the property being built or renovated
Loan Term
Usually short-term loans to align with the length of the construction project. Will often convert to a traditional home loan on completion.
Rates and Fees
Compare the rate, fees and conditions for the build period and after the final drawdown.
Disbursement
Often staggered as the construction project progresses.
Progress Report
The lender may want to conduct regular inspections to check on the construction project’s progress.
Construction Loans To Help Fund A Building Project
What’s the purpose of a construction loan?
A construction loan can release approved funds in stages as building work is completed, rather than paying the full building cost at the start. The lender may ask for the signed building contract, plans, permits and a valuation, then check each progress-payment request against its requirements. The builder’s contract and the lender’s drawdown process are separate: check both before work starts.
While funds are being drawn, some lenders require interest payments on the amount already drawn. Repayments can rise as more funds are released; the repayment arrangement after the final draw depends on the loan contract. Compare the rate, fees, construction period, repayment type and what happens if the build runs over time or budget. CommBank’s construction-loan guide explains one lender’s process; other lenders may differ.
For Victorian home builds, Consumer Affairs Victoria says progress payments are tied to completed contract stages and advises checking the work before paying. Absolut Financial can discuss loan options from its Kew East office. Contact the team with your plans and building contract to ask what a lender would need to assess.
Who can get a construction loan?
Whether a lender can approve a construction loan depends on the borrower, the property, the building contract and the proposed work. A lender may ask for:
- Income, expenses, existing debts and credit history to assess repayments
- Your deposit or usable equity and an independent property valuation
- A signed building contract, plans, specifications, permits and a builder’s details
- A budget for costs that may fall outside the contract and for changes or delays
Deposit and equity requirements vary by lender and project; there is no single 20% rule for every construction loan. Owner-occupier home builds, renovations and property-development projects may be assessed differently. Bring your plans to Absolut Financial so the team can explain the lender checks relevant to your project.
Let Us Help You Make Well-Informed Decisions
A trusted brand
At Absolut, we’re immensely proud of our record of helping clients source the funds for their dream construction projects, whether you’re building your own home or investing. Let us guide you along the process as we help you navigate the complex construction loan landscape, compare your options, and ultimately get approval for a loan to help those construction dreams become a reality.
When your financial well-being is at stake in a high-cost construction project, you must have somebody on your side to explain all the intricacies of progress payments, fixed-price building contracts, and how the principal and interest repayments affect balance in a construction loan.
Trust us to demystify everything for you.
A holistic service
We pride ourselves on offering a holistic, personalised service.
From the beginning of our journey together, we prioritise listening to your construction loan needs and scouring the market for a loan that suits your needs.
What’s more, throughout the end-to-end service, from exploring options to completing your application, we practice complete transparency as we think it’s important you know all the intricacies of the loan application process and the terms and conditions before you commit.
A construction loan can be the start of a new journey toward a better financial future, but you should be completely aware of the risks involved, too.
Leverage our experience to make applying for a construction loan a breeze.
Let the expert professionals at Absolut guide you through every step of the process to get your construction loan approved.
Why Absolut?
Why trust us with your construction loan application?
Personalised Service
We know you don’t have the time and resources to research everything, so we take the time to explain everything.
Eligibility explained
We explain lender eligibility, documents and costs before you decide whether to apply.
Knowledge Source
Don’t just take our word for it; check out what previous clients say about us!
Construction Loan Expertise
We’ll bring our vast experience helping clients just like you to the table.
Award-winning
Consistently recognised by the Australian Brokerage Awards.
Easy Applications
With our help, we take the stress out of the application process.
Testimonials
Frequently Asked Questions on Construction loan
What is a construction loan, and how does it work?
A construction loan is a short-term loan used to finance the construction of a new property or renovate an existing property. It’s different from a traditional home loan because you get it in stages as different phases of the construction process are completed, meaning you only pay interest on the amount drawn down.
What are the benefits of a construction loan compared to other types of financing?
One of the primary benefits of a construction loan is its flexibility in terms of the payment schedule and loan amount. Construction loans are typically short-term loans with flexible payment schedules that are based on the construction timeline.
What are the eligibility requirements for a construction loan?
There’s no one set of lending criteria for a construction loan. However, standard requirements may include a good credit history, a deposit on the loan, income verification, building plans and permits, and the use of a licensed builder or contractor.
What types of construction projects can be financed with a construction loan?
You can use construction loans to finance various construction projects, including single-family homes, multi-family homes, commercial properties, and industrial properties.
How long does the construction loan approval process take?
The construction loan approval process can vary depending on the lender and the project’s complexity. Generally, the process involves an application, credit check, and review of building plans and permits. The lender may also require an appraisal of the property being built or renovated. As part of our service, we can offer estimates on how long your specific process is likely to take.