Construction Projects

Financing Construction Projects

Financing Construction
Projects

Construction projects will require the council approved plans, Planning permit and fixed price building contract to be provided to the lender.  A conditional approval can generally be achieved subject to some of these being provided as a condition.  The lender will then order a valuation “as if complete” to determine if the end value will support the required loan amount including any existing lending.  The borrowers will require a full new loan application with supporting documents to determine if their income can adequately service the new loan without hardship.

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At settlement, the refinance will take place according to usual practice, if that is this forms part of the application.  The construction portion will be ready for progress payments.  The builder completes the work according to his contract and will submit his progress payment claim to the owner.  The owner presents this to their broker who will send it to the lender for payment.  The lender may send a valuer or quantity surveyor to assess the validity of the project claim.  This portion of the loan is usually interest only until the project is complete when it will revert to principle and interest loan repayments.

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