Construction loans are structured differently to home loans. The most important factor towards obtaining an appropriate construction loan is investing in a skilled broker. With the aim of building, both property and wealth, an experienced broker will understand, assess and evaluate your needs and wants, aligning them with current market trends.

Citywide Lending want to filter the finest option for your purpose.

In saying that, things to consider prior to applying for a construction loan include:

• What type of property is it?
• How much are you seeking to loan?
• What is your preferred payment type?
• Do you have a plan set out for your future constructions?
• Have you considered or compared interest rates for your forecasted loan amount?
• Are you aware of the eligibility requirements for a construction loan?
• Have you ensured that any changes or amendments to any plans are done prior to the approval of your loan?

If you are eligible for a First Home Owners Grant, Citywide Lending can assist you in applying for this in addition to your construction loan.

When taking on a construction loan, don’t take it lightly. Let Citywide Lending outlay the road towards a smooth construction experience.

Often always, applicants miscalculate the implications of loans and misunderstand the responsibility of one, especially a construction loan. Citywide Lending aims to ensure that you, the applicant, understand the commitments associated with a construction loan.

Important factors for you to consider are:

• The stakeholders associated with your project from architects, to plumbers, to council members
• The various stages of your project from preparation to completion
• The set budget you have prepared for your project
• Inspections and valuations involved
• Tests and surveys involved with the property throughout the construction process
• Site costs such as water, electricity, gas, etc.
• That little to no modifications are made to the plans of the project
• The extra (and handsomely high) costs that may be associated with any modifications made
• Any extra costs which may be involved must be factored in
• The process of a construction loans, from progressive drawdown to the final payment

Citywide Lending value the input and risk taken by you when applying for a construction loan, and treat the project as our own. We work behind and with you when seeking finance for your next build, and aim to achieve success with you throughout the process.

Each and every application accounts for various factors which contribute to the overall structure, and ultimately the success, of your loan. It is essential that whenever you are on the lookout for finance, you aim to optimise the return on the value of the asset. A few things to lookout for when considering a construction loan include:

• Interest Rate: Knowing whether the structure of your rate is commonplace, however, understanding the implications of both fixed and variable rates is crucial, as it affects overall return in the long run. This includes understanding the loan time and competitive current rates.
• Loan term: The time it will take to repay the loan is important in terms of understanding how interest may take a toll on your finances. Compromising payments, whether fortnightly, monthly, etc. are all dependant on individuals and can contribute significantly to the duration of your repayment time.
• Loan Type: Various loans means various options when it comes to selecting an appropriate finance lender. Understanding the array of loan options can impact the loan period, overall loan amount and return on investment in the long run.

Documentation is extremely important regarding transparency of the application from the applicant. As regulated by the Australian Prudential Regulation Authority, particular rules and regulations are in place regarding each type of application when gathering data, and are thoroughly examined to ensure that you make the perfect candidate for a loan. When preparing to gather documentation for a construction loan, look to gather information regarding:

• Personal:
  • Personal details
  • Annual Tax statements
  • Bank Statements (minimum 3 months)
  • Assets + liability statements

• Company
  • Company details  (extracts)
  • GST registration
  • Bank Statements
  • Tax portals
  • Assets + liability statements

In addition to these generic loan documents, the following documents are also required:

• From builder
  • Building contract/s
  • Progress payment schedule
  • Council approval loans
  • Receipts for any current purchases made on the site
  • Quotes for any intended items to be purchased for the construction
  • Builder insurance