Browse Forums Home Finance 1 Aug 24, 2011 3:25 pm Hello All I'm trying to figure out my finances and I've never done a construction loan before. Hope you can all help me. I plan on putting 20% down for a block of land and also the home. I understand the home loan will draw down over various stages as the house is built. So assuming I have a house and land that I'm happy with and finance isn't an issue can you guys help with the time the loan goes into affect and also how much the loan will increase by? Example: Land Cost 100k House cost 200k Buy land week 1 cost 20k loan 80k Home approved week 2 cost 2k loan 90k Slab laid week 3 cost 4k loan 110k Elevation week 4 cost 8k loan 150k Lock Up week 5 cost 12k loan 210k Complete week 6 cost 14k loan 300k I'm not sure if those are all the steps involved and I have no idea how long each one takes or what value each step is off the house. Some rough estimates would be greatly appreciated, like slab 20% of house price, elevation 40%, and so on. I'm in Perth, WA for context. I haven't been to a builder yet as no point getting my hopes up if my finances aren't right. Re: Construction Loan Timeline 2Aug 24, 2011 3:44 pm Not sure about others but for my lender (Homestart) I paid the deposit upfront, which turned out to be a combination of cash, first home owners grant and deposits I'd already paid to the builder and land agent. Now, everything else is paid for by the lender, i.e. remaining cost for land, interim payments to builder, and those extra bits and pieces (stormwater, paving, fencing, floor coverings). 23 Aug 2011: Land settlement 14 Sep 2011: Block levelled 20 Oct 2011: Slab 3 Nov 2011: Frame 10 Feb 2012: Handover http://s1098.photobucket.com/albums/g372/Dazzab6/ Re: Construction Loan Timeline 3Aug 24, 2011 7:21 pm HI Fiju- I think this is what your after- its the standard guildlines that the bank (this one is from NAB) and the LMI uses + the building association uses this guild as well.. There are normally 6 stages...The % is the % of the total loan cost. 1. Preparation -- 5% Plans, permits, connection fees, insurance, driveway crossings and soil test. 2. Base -12 %-- Concrete slab complete or footings and base brickwork complete. 3. Frame--10%--- House frame is complete and approved by building surveyor/inspector. 4. Lock-up---21%--- Windows/Doors ,Roofing, Brickwork, Insulation 5. Fixing--39%---- Plaster, Kitchen cupboards, Appliances, Bathroom, toilet, laundry fittings/tiling, Heating Fixing/internal doors etc, Plumbing,Electrical, Painting 6. Completion---13%-- Fencing, Site clean-up, Supervising builder Normally if your figures changes to much ie....your spending 15% on preparation cost instead of 5% ...the lender may question the price to make sure your not getting ripped off etc.. note: the % is based on standard build...if it's a luxry home , customised, larger, smaller etc the % would be diff and acceptable. Regards Michael Michael Chan | Australia wide Mortgage Broker Michael@ShapeHomeLoans.com.au | 1300 74 5626 | Fax: 02 8212 8909 http://www.ShapeHomeLoans.com.au Re: Construction Loan Timeline 5Aug 24, 2011 7:32 pm Also the % is based on Construction cost only -- not including land. Time frame, depends on your builder- the bank dont care as long as you finish within 12 month. Regards Michael Michael Chan | Australia wide Mortgage Broker Michael@ShapeHomeLoans.com.au | 1300 74 5626 | Fax: 02 8212 8909 http://www.ShapeHomeLoans.com.au Re: Construction Loan Timeline 6Aug 24, 2011 7:36 pm It is always about a month behind in payments, so as you get an invoice for the next stage, you will still be paying at the stage before, for a few weeks, before the payments go up to the next stage payments, which is good. Our house was built in 16 weeks from slab down, so each stage was very quick. Re: Construction Loan Timeline 7Sep 02, 2011 10:41 am My timeline was something like this: 1. Pay 5% deposit for land, from own money 2. Pay 5% deposit on building contract, from own money 3. Pay remained of my money that I declared to bank towards land settlement, bank makes up the difference 4. FHOG arrives in my account 5. Bank asks for part of FHOG towards each progress payment, paying the remainder themselves. I was surprised that although they asked for all my deposit up front at land settlement, they only asked for part of the FHOG at each progress payment. I don't know what their logic was, or how they decided how much to ask for at each stage. Metricon Riva 33 - http://herlihy-riva.blogspot.com Site start 15/03/2010 - Handover 23/12/2010 9 months and 8 days (284 calendar days) from site start to handover The biggest challenge will be if you take out a loan and then run out of money - you'll have an incomplete security and lenders do not like this so you can get stuck.… 2 19097 Hi, you've probably already resolved this, however, Commbank will probably pay the funds to you after you send evidence the work is done regardless the change in the quotes. 1 35326 How much are you ahead in payments compared to where the build is at? Have you fully drawn down the loan? 5 11916 |