loans.com.au Construction Home Loan
The secret to saving money while building your dream home
Building a home or carrying out serious renovations on your existing home allows you to have a major say in the environment your family lives in. Unfortunately it’s also an expensive undertaking, which is why it’s important to seek the right type of home loan.
A construction home loan allows you to draw down on funds when your builder requires them at each building stage. This means you avoid paying interest on any loan amounts you haven’t yet drawn down.
The loans.com.au Construction Home Loan is a low cost construction home loan which allows you to draw down on payments up to five times, and comes with a range of features designed to save you money, including interest only payments.
Richard Whitten is a money editor at Finder, and has been covering home loans, property and personal finance for 6+ years. He has written for Yahoo Finance, Money Magazine and Homely; and has appeared on various radio shows nationwide. He holds a Certificate IV in mortgage broking and finance (RG 206) and a Tier 1 Generic Knowledge certification (RG 146).
It’s a full documentation loan, meaning that to be eligible you must be able to supply the full range of income evidence and documents including payslips. If you require a low doc loan, you might want to start a comparison on our low doc page.
- Purchased your land
- Chosen a master builder
- Finalised your building plans
- Received a copy of your building contract, which must be a fixed price contract (meaning your builder has allocated a fixed price to each building stage)
Once this is completed, you’ll be able to draw down at each of the five stages of building your home, including:
- When the slab is down
- When the frame is completed
- At the lock up stage
- At the fixing stage
- At completion
About this loan
What are the features and benefits of the loans.com.au Construction Home Loan?
- Maximum loan amount. You can borrow up to a maximum of $1,000,000 with this loan, and a minimum of $50,000.
- Maximum LVR. There's a maximum LVR of 90% with the Construction Home Loan, but keep in mind that borrowing with an LVR of greater than 80% will come with Lender's Mortgage Insurance (LMI) charges.
- Construction features. As mentioned, this loan comes with the ability to make drawdown payments to your builder at the five stages of building. Keep in mind also that this loan covers a maximum construction period of 12 months.
- Interest-only payments. This loan only requires you to make interest-only payments during construction, helping you maximise your cash flow during this expensive time.
- Offset account. There's an offset sub-account available with this loan, although it should be noted that it's only available once construction is complete and the loan rolls over to the loans.com.au Home Loan.
What fees and charges come with this loan?
- Early discharge fee. $300. You'll have to pay this fee if you pay your loan out early.
- Settlement fee. $300. You'll be required to pay settlement fees to finalise your loan application and receive your funds.
- Construction admin fee. $120. This extra fee is charged to cover the associated costs loans.com.au will incur as a result of this loan.
- Progress inspection fee. $110 per stage. loans.com.au will require an independent valuer to visit your property during the construction and ensure that your builder has finished the work detailed in their invoice. The total cost of this over the five stages is $550.
Are there any hidden fees with this loan?
The loans.com.au Construction Home Loan fees are mentioned above. Note that there are still some charges you might have to pay which are not factored in above or in the comparison rate.
Note too that the valuation fee is $220, or at cost, which means depending on your situation this fee could be higher.
Who is loans.com.au owned by?
loans.com.au is an online-only non-bank lender. They're a privately owned mortgage company and are 100% Australian owned. In addition, loans.com.au is underwritten by Firstmac, a large Australian mortgage company with $8 billion in managed mortgages and over 35 years of experience in the banking industry.
How to apply
To apply for this loan or find out more, click the 'Go to Site' or 'Find out more' buttons on this review page. This will safely take you to the loans.com.au website, where you can fill in some basic details and speak to a loans.com.au representative about your loan. loans.com.au has an easy-to-understand diagram included below which summarises the whole application process.
The below diagram is courtesy of loans.com.au and represents the loan application process after you contact them.
When applying for this loan, loans.com.au will want to know if you can afford your repayments, so they will want the following details:
- Income information. loans.com.au will want to know your current income and details about your employment.
- Debt information. Before granting you a loan, loans.com.au will require you to give them information about your current debts.
- Personal information. You'll also be required to provide loans.com.au will identification and contact information.
The loans.com.au Construction Home Loan could see you get into your dream home without hefty fees or features you won't use. Add it to your comparison today.