Home Loans for building home

Hi Folks

I have been searching the banking websites to see which mortgage
product I would be going for, the interest rates for building your home
are considerably more than buying established which I can understand why.

Can anyone recommend a mortgage company when it comes to building your own home?

Cheers
G

I would suggest going through a broker. Ours worked out the best type for us based on our earnings and requirements. Our loan is a standard variable rate, but during the construction period we just pay the interest on the drawn down amount. Then it just becomes a normal payment schedule when we complete building. Our rate is in fact lower than some others because we went a no frills option

You don't necessarily have to pay more for a loan for building than for buying established. Our bank (Member's Equity) has the same standard variable for either. You just draw down on your loan at each stage payment.

We have a construction loan like the posters above, draw down funds as needed to pre- approved maximum amount and just pay back interest during construction period, I think this is fairly standard for construction loans, although ours does allow us to pay back more if we wish.
With our credit union, the Interest rate is exactly the same as for standard mortgages for established homes.

We too are building ATM, and we are also paying the same interest rate as we would have been if we had a loan for an established property. Only difference being that we are paying interest only until the completion of the build at which time we will then have a choice of the full range of P+I home loans.

I think the increased interest rates may be related to the LVR - if your land LVR is above 90% and/or the construction exceeds 95% then you may be up for higher interest rates as well the LMI (with some of the lenders at least).

Try cannex.com.au and ratecity.com.au if you haven't already and good luck.

I was going through capital trust for my construction loan. When I went for pre approval for the land home construction and pool contruction (house is built around pool so the pool slab needed to be finished before the house construction) I was told no problems and was given the pre approval.

Six months on and now that I have paid all my cash deposits and ready to proceed I get from them we can't do the pool anymore. Their new solution is a very expensive $50,000 dollar personal loan for the pool... Not really a good option.

Three brokers later and nobody was able to find a lender who would touch the pool as part of the construction loan. I was starting to sweat!

At last weekends home show I got talking to a guy from Bankwest. Made an appointment to see him a couple days later at his branch in the city. Two days on and I have pre approval from bankwest who will fund the house/land and pool all in the one construction loan. The rate is 8.35% and there are no fees at all! They were happy to have a look at the entire project as a whole and consider it on its own merits!

Very impressed with his service!

If anyone is interested PM me and I will pass on his details. He's worth a talk to.

A quick question for those who loan through CBA. My builder is charging me arms and legs to do the flooring in my house. So I planned to use external flooring contractor to do the flooring. However, my loan manager in CBA says that they will only accept quotes from the builder and not other small contractors. Is this the case or has she been misinformed? I read some of the post here states that some banks will consider the external quotes as part of the house loan.

does anyone have any experience with aussie? they have this deal going at the moment where they'll give you $500 worth of fuel if they can't find you a cheaper home loan...i'm not sure if this applies only to people with loans or not, though. i don't know what they're like to work with but i don't think it would hurt to get a quote..

(sorry G for tacking on this question to your thread - it might be of some interest, though! )

thoughts? anyone?

Just tell them you will take your business elsewhere if they dont. IF you are getting the quote and work done by a flooring company that should be fine, some banks dont like you doing it yourself though.

Thanks Adrian B,

Any idea which banks are more flexible in allowing you to do the flooring through the flooring contractor. I have told CBA that I will take my business elsewhere but they still would not let me do it.

Mortgage managers who use the banks' funding but make the assessment decisions in house are always flexible with your suggestion. I have had customers do 100% finance construction where they used independent suppliers to install a/c, driveway, landscaping, etc. after construction. All these extras were financed by the lender. Reputable mortgage managers include Homeloans Ltd, Bettaway, Australian First Mortgage.

Any Bank will let you get the work done - but you need to provide quotes for the valuation to be completed. They aren't going to release funds without an itemised quote for them to value the job on. When I was a lending manager wasn't a problem for the Bank to fund flooring / air cond / pools etc as long as they were carried out by a person / company that supplied quotes. Our valuer then valued the building as having all of the included options. Funds were released like any normal progress payment.

Hi Pollock,

We just received formal approval for our building loan today and we are about to start our build next month.

The process has been a long one, but our Mortgage broker (Glen) at Aussie Home Loans Carnegie VIC has been great. He was able to provide excellent service and recommended us a good loan package that is currently very competitive.

My partner and I are very happy with Aussie and would recommend them to anyone! (I can only speak for the Carnegie Branch of course).

Hi kyton, where do you work? I remember your signature used to have a lender's name. Or am i mistaken?