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Once the construction is complete and you are happy with your final inspection, the remaining balance will be paid to your builder once they provide you with the final invoice. You will then transition to regular scheduled payments which will either be interest-only or principal and interest.
The builder you choose to do the work you need is entirely up to you as long as they can provide you with the paperwork required by your lender including a building contract and progress invoices.
Payments from your construction loan are made by your financial institution directly to your builder once you provide the lender with a signed copy of your builder’s invoice. These payments are made at multiple stages of the construction process.
A construction loan requires an “As if Complete” valuation of the planned construction project and a contract from your chosen builder to go ahead in addition to the regular documents, like payslips and tax returns, that your construction loan broker will require to make your mortgage application.
The payouts on a construction loan are made in instalments throughout the construction process rather than in one lump sum.