Building your own home has many benefits. You can customise the home to suit your lifestyle and needs. For most who embark on building their home, it also gives a sense of satisfaction, pride and achievement.
Not all lenders will advance a home loan for construction purposes, so it is important to shop around. Generally, in addition to the normal credit assessments, lenders will want to see the following in place before committing to an offer of finance:
- Architects plans
- Council approval
- Fixed price contract with a builder
- Builder’s insurance
Funds for building are released and paid to the builder in stages, called ‘progress payments’ after the work has been satisfactorily completed at each stage. The number of progress payments will depend on the size of the project. The lender will conduct its own inspections at each of these stages. Read more.