16 Dec 2016
CONSTRUCTION LENDING FRAMEWORK
It is the great Aussie dream to own our castle, even better it is seen to be better to build it and then to pay of the loan. Construction lending has a few differences that need to be considered. It is of course necessary to find a suitable block of land, but it is equally important to limit the time that the land is held without building on it. Whilst holding land the repayments would then be made on the loan whilst waiting for soil testing, fixed price building contracts (etc.) and for council to approve plans. In saying this it is worthwhile getting the build items underway as soon as practical. Once land is settled then it is important to keep the funds secure for the build deposit as this will be used in the first progress payment. Interest will then be charged on funds released during progress payments until the construction is complete. This may sound complicated, but its all in a simple days work for a skilled finance broker.