Different types of people choose to build a home rather than buy something established: A lot of First Home Buyers opt to build their first home to take advantage of the current First Home Owners Grant – which assists with your deposit and can save you thousands of dollars Others might opt to knock down an established property and re-build, as this may be the more cost effective and/or feasible option Here’s how a construction loan differs slightly to a normal home loan: A construction loan is structured about the building process, with staggered payments until the property is completed There’s usually 5 stages – with a increase in repayments at each stage. These are called Progress Payments There’s usually at least 2 valuations completed on the property – once prior to loan approval and commencement of construction, and once upon completion. However some lenders require further valuations These valuations ensure that everything is on track and within budget. This gives you peace of mind that your builder or contractors aren’t being paid for incomplete or sub-standard work Lenders will want to see a Fixed Price Build Contract, Plans and full Specifications for your loan to be approved. During construction, you will only be charged interest on the loan funds used so far. This minimises your outgoings during the build, and it also helps if you’re still paying rent. Once your home is completed, repayments will move to principal and interest and you’ll pay the full amount of your monthly home loan commitment. I always suggest you try to have some extra savings available to not only cover your first round of new bills – like rates, water and electricity, but also some money for some new furniture, white goods or decorative pieces. For more information please contact me on 0414 891 931 or kaia.hunter@mortgagechoice.com.au #kaiahunter #mortgagebrokersunshinecoast #homeloans #mortgagebrokermaroochydore #howdoIbuymyfirsthome #howdoconstructionloanswork #mortgages