Construction Loans - It's Simple
  • Want to build instead of buy?

It’s Simple can help you get started today.

Whether you’re building your dream home or doing renovations, getting the right construction loan can make a big difference.

You have enough on your hands undertaking a large construction project, so let It’s Simple Finance help you find a loan with a no-cost service saving you time and money.

Frequently Asked Questions:

Construction loans are simply loans which are designed for borrowers who are building a home or doing renovations instead of buying a pre-existing property. They have a set of features specific to construction which are outlined in the sections below.

A construction loan works in a similar fashion to most types of loans but often has one key difference – Progressive drawdown.

When you think of the building process, it starts with the foundations then gradually builds up into the finished project. If you used a standard loan, this would generally mean you would be paying interest on the loan from the date you draw down and use the funds. However, a construction loan works differently.

Rather than receiving the full value of the loan (and paying interest on the full amount), the borrower receives it in instalments following the completion of different stages of the buildsuch as slab down (the foundations), framing, lock up (once the property can be fully secured), fit out and completion.Interest is generally charged only the amount drawn down.

There are many reasons to consider building over buying an existing property. New builds or renovations provide their owners a property which better meets their needs. Building ‘granny flats’ and other detached dwellings can add value to the property. To successfully complete your project on budget, you need a loan which matches the type of building project you are embarking on. It’s Simple Finance are a Sydney-based mobile and digital broker who can find you the right construction loan to get your project moving.

There is a different process for applying for a construction loan. Generally, the borrower needs to provide a number of additional information relating to the building project such as the building contract, insurances, and council plans and approvals.

Where it also differs is that there will be an estimation of the property following the construction work. In fact, there may be multiple valuations completed through the construction process.

Like other loans, you will need to pay a deposit (and lender’s mortgage insurance if you have a deposit of less than 5%) and pay back the loan over the approved term.

It is also important to note that some lenders will only lend if the building work is being done by a professional third party builder. However, other lenders can and do lend to owner-builders but the terms and features may be different, for example the loan may have a higher lending to valuation ration (LVR).

In this guide, we very simply break down the buying and borrowing process, terms you might not be familiar with, your borrowing capacity and loan documentation, current government assistance available to first home buyers and provide more of our #simpletips.

Use our calculator to see your home loan repayments and see how much you could save.

We keep things simple

Lenders can make it far more challenging than it needs to be. We work hard to keep things easy and straightforward.

Fast, mobile and digital

We know you want to spend less time arranging your finances and more time enjoying life. That’s why we provide complete flexibility in how and when you deal with us, as little or as much as you like and via Zoom or a visit to your home.

We work for you

We work with over 45 lenders to find you a solution tailored to your specific needs.

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