Construction Loans Melbourne

Are you looking for home construction loans in Melbourne?

For a free consultation on your home loan options, give us a call or come in for a chat at our Mount Waverley, Port Melbourne or Chadstone offices.

Building a new home or undertaking a renovation in Melbourne can be an exciting prospect, but the financing process can be daunting. A home construction loan can be the ideal solution as it allows you to cover building costs in instalments, paying interest only on what has been withdrawn.

However, securing a construction loan can be vastly different from obtaining a standard home loan, with many complicated rules and criteria to navigate. Luckily, our team of experienced brokers specialise in construction finance and can provide expert guidance on the best lending solutions for your unique situation. We'll help you to understand the complexities of the application process, and work with you to structure the right loan to finance your dream build. With our support, you'll have access to the best construction loan rates available in the market.

Review Your Construction Plans

When looking to build a property, it’s important to first review your construction plans and put in place an appropriate construction loan to help with the process. The better we understand your goals with the property, the better we are able to tailor the right construction loan in Melbourne to finance your build.

Review Your Borrowing Capacity

The most important element of any loan is understanding what a bank is willing to lend you. This is known as your ‘borrowing capacity’ and it will dictate what funds you’ll need to contribute from your personal savings to satisfy the bank. This is when we review your income, expenses, liabilities and savings to understand your maximum construction loan limits and deposit requirements.

Propose a Lender and Seek Approval

After we have all the information we need, we will propose a lender based on the best loan rates and construction loan process. Once a lender is chosen, we will perform the necessary duties to submit your loan application and finalise an approval.

Settlement and Progress Payments

Once your loan is approved, we will coordinate the settlement and confirmation to your builder. As your builder starts the build, they will request invoices (as per your building contract) as part of a progress payment schedule. We are here to help manage the payments from the bank to the builder throughout the whole process, including any variations or issues that may arise.

Completion and Handover

Once the build is completed, a final inspection will be ordered by the bank and the last progress payment made. Interest rates and the market may have changed between the time of approval and final payment, so we suggest re-reviewing this now that the build has been completed.

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5 Tips For Your Next Construction Process

With the construction industry on shaky ground, many Australians are feeling nervous about their next build. In this video, Shehan lays out why Porter Davis failed and how you can avoid being caught out by a builder suffering the same fate. Here are five tips for a successful construction process.

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Construction Loan Specialists

We know that construction projects can be complex and require specialised financing solutions. That's why we offer expert guidance to help clients navigate the process of securing construction loans. Our team has the knowledge and experience to help you find the best construction loan solutions to fund your project, whether you're building your dream home or a commercial property.

With our support, you can ensure that you have the right financing in place to bring your construction project to life. We'll work with you every step of the way to ensure you have the funds you need to achieve your construction goals.

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A Complete Guide to Construction Loans

If you’re building a new home or renovating your current one, chances are you’ll need a construction loan to finance your build. Unlike a standard home loan, a construction loan is structured around the building process, allowing the borrower to make progress payments to the builder at key stages of the build... Here's what you need to know.

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A home owner inspects the construction of his new home with a builder

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Meet the Finance team

Our finance team have been with Elephant from day one, delivering expert home loan solutions for over six years. Starting from humble beginnings in a shared office space, Shehan and Gavin slowly built up a loyal customer base through a reputation for excellent customer service and results.

Both mortgage brokers have received numerous nominations and awards over the journey, including Best Customer Service and the Best Loan Administrator at Victoria’s Better Business Awards. Today, the pair are now experienced veterans in the industry who continue to provide stellar servicing for each of their clients.

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Finance

March 29, 2023

Gavin Hepponstall

Six Tips for Negotiating A Better Interest Rate with Your Lender

Negotiating doesn't have to be difficult, and there are several things you can do to maximise your position and get the lowest possible rate for your home loan. In this blog, we'll outline six great tips to prepare you for negotiating a better rate with your lender.

A complete guide to construction loans

If you’re building a new home or renovating your current one, chances are you’ll need a construction loan to finance your build. Unlike a standard home loan, a construction loan is structured around the building process, allowing the borrower to make progress payments to the builder at key stages of the build.

Fixed Rates vs Variable Rates: Which Is Better For You?

There are many different home loan options available including your repayment type and the lender you borrow from. Choosing between a fixed or variable rate is one of the most important loan decisions you’ll need to make and will come down to your personal preferences.

Construction Loan FAQs

Are construction loans more expensive than normal home loans?

In some instances, a construction loan can be more expensive than a normal home loan. Depending on the lender, there will be interest rate loading or Interest Only repayments that can attract a higher cost during the build process. Be mindful that there can also be fees associated with the payments to the builder which is an important consideration when deciding on the right construction loan.

What are progress payments?

Within most build contracts there will be a progress payment schedule which outlines the stages in which the builder would like to receive payments. These payments will coincide with milestones of the build. For example; deposit, slab, frame, fixing, lockup and completion are all common stages for standard home build. A lender will review these and use your approved home loan to pay the builder in accordance with the signing building contract.

Can I have Interest Only during the construction phase?

Most lenders that have good construction loans allow for Interest Only during the building phase. This enables you to only pay when each stage of your build is paid for. Once the property is completed, your loan will convert to the standard Principal & Interest loan.

How do I choose the best construction loans Melbourne?

An independent mortgage broker will be able to sift through the many different lenders and rates to find the best loan outcome for you. Elephant Advisory’s finance team specialise in Melbourne construction loans and have a long history of helping clients finance builds and renovation.

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