If you have never applied for a construction loan before, it can be a daunting experience. This is why you should be working with a construction mortgage broker. They may be able to find you a loan outside of your bank because they have access to alternative lenders. These lenders may offer better loans and interest rates than banks or other institutional lenders.
The funds you get with a construction loan are paid out in stages. As you complete the different parts of your construction project, more cash is advanced to keep the project moving along. For example, if you already own the land, you are building on, the first payment would be used to start your construction project. If you have to purchase land, then that would be the first payment.
After each completed stage, an inspector will visit to make sure that everything that has been done is up to code and building standards. Once this is done you move on to the next stage in the project. If you hire a mortgage broker Sydney, they will help you walk through each of these steps to make sure everything is going according to plan. They will help you secure the financing you need. A mortgage broker understands that it is critical that you have construction financing, and they know how to achieve this to help the project run smoothly.
The mortgage broker will help you understand the challenges and demands that come with a construction project. They will make sure that you will have the right lender and they know how to ask for the right loan amount as they have experience with a construction loan. They can also help you find an architect to help design your new home. They can also help with finding the right contractor and help to obtain the necessary permits.
When considering a construction loan, there are two different types, which include:
- Purchase plus improvement—this type of loan will let you purchase a home that just needs some care. It will take a lot of work to get all those contractor quotes for the different things that need to be fixed. The mortgage broker can help with all of these things, including getting the loan
- All-in-one construction—this is just a regular construction loan that will give you a loan for the financing that comes at the end of the project and to begin the process. Most of these are for twelve months and penalties can occur if you go over that time. With a mortgage broker, they have the knowledge to get you a type of construction loan that will be longer than twelve months.
Conclusion
When using a mortgage broker Sydney, they know how to work with the lenders and can get your construction loan quickly approved along with a great interest rate and decent monthly payment. If you are considering applying for a construction loan, consider talking to a mortgage broker that has experience with this type of loan to help you through the process.
