SKIP THE BORING CONSTRUCTION LENDERS AND TALK TO A HUMAN WHO KNOWS WHAT THEY’RE TALKING ABOUT
While the idea of designing and building your dream home is very appealing, we’ve all heard about the stress that often goes alongside it, and occasionally, the horror stories. It’s true that building your own home can be more complex than buying an existing property.
Getting your financing sorted is the literal foundation of the build; without it, you’re just staring at a very expensive pile of dirt. We’re here to help you find a construction lender that won't give you a migraine. As your single point of contact, we handle the boring bits like bank liaison and the mountain of paperwork, making sure you get the support you need to turn those blueprints into a home.
What is a construction loan?
Construction loans are different from a standard home loan. They’re designed specifically for people building from scratch or undertaking major renovations. With a home construction loan, you generally receive instalments of the loan at various stages of the build, as opposed to receiving it all at the start in one lump sum. The biggest benefit is that you normally only pay interest on the amount that’s drawn down as opposed to the total loan figure.
What are the actual steps? (Besides just digging a hole)
The first step is to receive preapproval for the construction loan. Then come the building plans and specifications (specs), along with a build contract. Once all these are approved, you will have progress payments throughout the various stages of the build to cover the cost of each stage. This is paid directly to the builder from the loan. The five stages are typically:
- Base Stage (foundation of the property, slab or base)
- Home Frame (partial brickwork, roofing, trusses or windows)
- Lock Up (building enclosure, external walls, windows and doors)
- Interior Fit Out (internal fittings and fixtures, plasterboards, plumbing, electrical)
- Completion (finishing touches such as plumbing, electrical and overall cleaning)
While construction loans are more complex than traditional home loans, they don’t need to be more stressful. The Happy Finance Company will make sure you get the loan that best suits your build scenario and will guide you through every step.
Why bother with a broker instead of going straight to a construction mortgage lender?
Loyalty is a great quality in a kelpie, but it’s rarely rewarded by big banks when you’re trying to build a house. If you go directly to one construction mortgage lender, you’re stuck with their specific rules and rates, even if they don’t actually fit your build.
Here is why having us in your corner makes the journey a lot less of a "horror story" and a lot more "happy":
- We have a bigger menu: While a bank only sells its own products, we have access to home construction loans from over 30 different lenders.
- We hunt for the "best": We compare the market to find the best construction loans in Australia based on your specific situation - whether you're a first-timer or a pro.
- Best Interests Duty: Unlike a bank employee, we’re legally required to act in your best interests, not the lender's.
- We speak "bank" so you don't have to: Construction involves a mountain of forms and constant back-and-forth for every progress payment. We handle the liaison with the lender so you can stay focused on your job or picking out the perfect kitchen tiles.
HERE'S HOW WE'LL HELP YOU FIND THE BEST CONSTRUCTION LOANS IN AUSTRALIA
We know our sh*t
We have over 30 years of collective experience and are working in the thick of it every day. We know the application process inside out – the bank policies, the timeframes, possible delays, and the forms. All those FORMS. While there’s no getting around them, we’ll make them easier to understand and complete.
We find your right match
Loans are not a one-size-fits-all. Many people focus on the interest rate, and while this is important, it’s not the be-all-end-all. Your loan type will depend on things like your age, savings, equity, future business/work plans and family plans. Did you know, some banks offer a break from repayments when you take maternity leave? We have access to hundreds of loan products across over 30 different lenders. We’ll find the right one for you.
We find competitive options
While the interest rate isn’t always the be all and end all, we still strive to get you the best possible rate and loan package to fit your circumstances. Even a savings of 2-3% of a home loan over a five year loan period can reduce your payments significantly.
We do the hard stuff
Once we’ve worked out which lender and which product is right for you, we prepare the application for you. We are your single point of contact so that you don’t have to sit on hold with various banking departments and explain your story to numerous representatives. We do the forms and the liaison so you don’t have to.
We love teaching
Whether it’s your first home and you need help understanding the basics like interest rates and LMI, or your tenth property and you want to talk strategy, capital gains and LVRs, we’re here to help. Diagrams, scenarios, spreadsheets… whatever you need.
We work for YOU, not the banks
Our service doesn’t end once your loan settles. We’ll be in touch when interest rates drop, when your fixed interest period expires, and every few months to touch base. New cars, home renovations and other big life events may mean we can swap your loan conditions to more favourable options.
Our services to you are complimentary
We get paid by the bank when your loan settles, meaning the benefits of using a broker don’t come with an extra charge. And just to ease your mind…. The commissions paid by Australian lenders are all within a similar fee structure, so there is no benefit to us for choosing one lender over another. It’s ALL about you.
Ready to turn that dirt into a driveway? Whether you’re doing business in Brisbane, soaking up the sun on the Sunshine Coast or anywhere in Australia, we’re ready to chat. Let us handle the bank matters so you don’t have to. Book a FaceTime or meet us in person today!
Frequently asked questions
What is a construction loan, and how does it differ from a regular home loan?
A construction loan is purpose-built for building from scratch or for major renovations. It differs from a regular home loan, which is for buying an existing house with a lump sum. Instead, money is released in stages as work progresses. This means you only pay interest on the money used (the "drawn down" amount) rather than the total loan figure. It’s a smarter way to build.
What are the stages of a construction loan drawdown?
The drawdown process typically follows five key stages to ensure builders are paid as they work. It starts at the Base Stage (foundation), moves to the Frame and then Lock Up. Next is the Interior Fit Out, ending with Completion for final touches. We manage these payments with your lender so you can focus on choosing tiles instead of chasing bank forms.
Are construction loans more expensive than regular home loans?
Not always. Construction loans can sometimes have slightly different rates or fees, but the main difference is how the loan is paid out and repaid.
Instead of receiving the full loan amount upfront, your lender releases funds in stages as your build progresses. These are called progress payments. During construction, you’ll usually only pay interest on the amount that has been drawn down, not the full approved loan amount.
For example, if your loan is approved for $700,000 but only $200,000 has been released to the builder, you generally only pay interest on that $200,000 during that stage.
This can help keep repayments lower while you’re building. However, costs can still add up if there are delays, variations, valuation issues or unexpected expenses. That’s why comparing lenders matters. We compare over 30 lenders to help you find home construction lenders with competitive rates, suitable progress payment terms and a structure that fits your build.
ANDREA PALELLA (O'SHEA)
MATTHEW GOODYEAR
MATHEW CROSSLEY
JESSE ROSS
