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Building a new home is one of the most exciting things you can do, and having the right finance behind you makes all the difference. At First Home Loan Co, we help clients in Mentone and across Australia access Construction Loan options from banks and lenders across Australia, so you can focus on bringing your vision to life rather than worrying about paperwork and lender requirements.
What Is a Construction Loan?
A construction loan is a type of building loan designed specifically for people who are building a new home rather than buying an existing one. Unlike a standard home loan, the funds are not handed over in one lump sum. Instead, the lender releases money in stages throughout the build, in line with a construction draw schedule. This means you only pay interest on the amount drawn down at any given time, which can help keep your repayments lower while your home is being built. These staged releases are known as progress payments, and they align with key milestones in the construction process.
How Progress Payments Work
The progress payment schedule is agreed upon before construction begins and typically covers stages like the slab, frame, lock-up, fit-out, and practical completion. At each stage, the lender may arrange a progress inspection to confirm the work has been completed before releasing the next instalment. This protects both you and the lender by making sure funds are only released for work that has actually been done. It also means the builder, along with any plumbers, electricians, and other sub-contractors, gets paid progressively as the project moves forward.
Types of Construction Finance We Can Help With
At First Home Loan Co, we work with a wide range of construction funding situations. Whether you are looking at a land and construction package, a house and land package, a project home loan, or a custom home finance solution, we can help you explore your options. We also assist clients looking into owner builder finance, off the plan finance, spec home finance, renovation finance, and house renovation loans. If you are planning a home improvement loan or need progress payment finance for a larger development, we can help you understand what lenders are looking for.
For those purchasing suitable land separately and then building, a land and build loan may be the right fit. This type of construction to permanent loan structure allows you to purchase the land and then transition into the construction phase under one overall lending arrangement. First Home Loan Co can walk you through how these structures work and what to consider when comparing options.
What Lenders Generally Look For
Lenders have specific requirements when it comes to construction loan applications. Most will want to see a fixed price building contract from a registered builder before they approve the loan. This gives the lender confidence that the total cost of the build is known upfront. A cost plus contract, where the final price is not fixed, can make it harder to get approval, though some lenders do consider these on a case-by-case basis.
You will generally need to have council approval and council plans in place, or at least a development application lodged, before the lender will finalise your construction loan. The loan amount is typically based on the land value plus the cost of construction, and lenders will assess your ability to service the loan throughout the build and beyond.
Most construction loans come with interest-only repayment options during the construction period, which means you are only paying interest on the progressive drawdown amount rather than the full loan balance. Once construction is complete, the loan usually converts to a standard principal and interest loan. It is worth noting that lenders often require you to commence building within a set period from the Disclosure Date, so timing matters.
Construction Loan Interest Rates and Fees
The construction loan interest rate can vary between lenders, and there are sometimes additional fees to be aware of. One common charge is a Progressive Drawing Fee, which lenders apply each time they release a progress payment instalment. These fees can add up over the course of a build, so it is important to factor them into your overall budget. First Home Loan Co can help you compare options and understand the full cost of different construction finance products before you commit.
Why Work With First Home Loan Co?
Building your dream home with a custom design or through a quality construction builder is a significant commitment, and having a knowledgeable mortgage broker in Mentone by your side can make the process much smoother. First Home Loan Co works with a broad panel of banks and lenders, which means we can present you with a range of construction loan options suited to your situation rather than being limited to one lender's products.
We understand that new home construction finance is not one-size-fits-all. Whether you are a first home buyer, an investor looking at building new home finance, or someone exploring renovation finance and mortgage broker support for an existing property, we take the time to understand your goals and circumstances. Our team also assists clients with investment loans and refinancing needs, so we can support you at every stage of your property ownership experience.
If you are ready to explore your construction loan options or simply want to understand more about how building loan finance works, reach out to the team at First Home Loan Co. We are here to help clients in Mentone and across Australia find construction funding solutions that suit their needs.
Step 1: Get in Touch
Everything starts with a conversation. Reach out to us by phone, email, or through our website. We will set up a time to chat that suits you, whether you are in Mentone or anywhere else in Australia.
Step 2: Understand Your Goals
We take the time to learn about your situation. What kind of home are you looking for? What is your budget? Do you have a deposit saved? There are no silly questions here. The more we know, the better we can help.
Step 3: Review Your Finances
We look at your income, expenses, savings, and credit history. This gives us a clear picture of your borrowing power and helps us find the right loan options for you.
Step 4: Compare Loan Options
We search across a wide panel of lenders to find loans that suit your needs and budget. We explain each option in plain language so you can make a confident, informed decision.
Step 5: Submit Your Application
Once you have chosen a loan, we handle the paperwork. We prepare and lodge your application on your behalf, making sure everything is accurate and complete to give you the best chance of approval.
Step 6: Approval and Settlement
We stay in close contact with your lender throughout the approval process. We keep you updated every step of the way and work with your conveyancer or solicitor to make sure settlement goes smoothly.
Step 7: Ongoing Support
Our relationship does not end at settlement. We check in with you regularly to make sure your loan is still working for you. As your life changes, we are here to help you review your options and make the most of your mortgage.
Maurizio has been our mortgage broker for years now, and he's made every loan feel easy - a simple refinance, a new home build, subsequent refinances and loan splits, you name it. His communication is spot on, his attention to detail is excellent, and he's always quick to respond. On top of all that, it also helps that he's consistently found us the sharpest rates! We'll be sticking with him for the foreseeable future. Highly recommended.
Jethro Kairys
Maurizio came to us highly recommended and we were really happy with the service Maurizio provided when applying for our first home loan. He made the whole process clear and easy to understand, taking the time to explain the more complex parts along the way. Maurizio and his team were prompt, professional, and kept us informed at every stage. We felt well supported throughout and were so happy with the experience that we have also used Maurizio’s services to refinance our loan. Would 100% recommend to First Home buyers or anyone that needs mortgage advice.
Jillian Wood
Maurizio was fantastic to deal with. He made the whole process seamless and was always willing to answer our questions and help where possible. In what could have been an extremely stressful process, Maurizio made it as easy and stress free as possible. I would recommend to anyone.
Liam Fisher
Before I contacted First Home Loan Co I was unsure of my position to purchase a property. After the first meeting with Maurizio he was able to explain everything and provide a clear pathway to becoming a home owner. I have successfully purchased a property now and Maurizio was guiding me through each step, answering any questions I had and going out of his way to assist.
Frank b
Having a smaller deposit does not necessarily mean you cannot apply for a home loan, though it can affect the options available to you. In Australia, most lenders prefer a deposit of at least 20 per cent of the property value to avoid Lenders Mortgage Insurance (LMI). However, there are loan options available for borrowers with a smaller deposit, and some government schemes may also help eligible buyers. At First Home Loan Co, we will take the time to understand your current savings position and explain what options may be available based on your circumstances. We will also help you understand any additional costs that may apply so you can plan accordingly.
Once your home loan has been approved and settlement has taken place, our relationship with you does not simply end there. At First Home Loan Co, we believe in building long-term relationships with our clients. We are happy to check in with you over time to make sure your loan is still working well for your situation as your life and circumstances change. Things like changes to your income, family situation, or property goals can all affect whether your current loan remains the right fit for you. We are always here to answer questions and provide support as you continue your journey as a homeowner. You are not just a transaction to us, you are a valued client.
While the exact documents required can vary between lenders, there are some common items that most lenders will ask for. These typically include proof of identity such as a passport or driver's licence, proof of income such as recent payslips or tax returns, bank statements showing your savings and expenses, and details of any existing debts or financial commitments. If you are self-employed, you may need to provide additional documentation such as business financial statements. At First Home Loan Co, we will give you a clear checklist of what you need to gather before we submit your application, so you feel prepared and confident going into the process.
When you go directly to your bank, you only see what that one lender has to offer. A mortgage broker like First Home Loan Co has access to a wide range of lenders and loan products, which means we can look at more options on your behalf. Your bank will always recommend their own products, whereas we work for you. We take the time to understand your personal circumstances and then look across multiple lenders to find options that may be a good fit. This broader view can be really valuable, especially for first home buyers who may not know what to look for or what questions to ask.
Absolutely, helping first home buyers is at the heart of what we do at First Home Loan Co. Buying your first home is one of the biggest financial decisions you will ever make, and it can feel overwhelming when you are not sure where to start. We are here to walk you through the process from beginning to end. We will explain how home loans work, help you understand what you may be able to borrow, and look at loan options that suit your situation. We can also help you understand government schemes and grants that may be available to first home buyers in Australia, such as the First Home Owner Grant.
While we are proud to serve clients in Mentone and the surrounding local area, First Home Loan Co works with clients right across Australia. Whether you are based in Melbourne, regional Victoria, or anywhere else in the country, we are set up to help you. We can meet with local clients in person and connect with clients in other locations via phone or video call, making it convenient no matter where you are. Our goal is to provide the same level of care and attention to every client, regardless of where they live. If you are looking for support with your first home loan, we would love to hear from you no matter where you are based.
In most cases, our service comes at no direct cost to you as the borrower. Mortgage brokers in Australia are typically paid a commission by the lender once your home loan settles. This means you can access our knowledge and support without paying out of pocket for it. We are always transparent about how we are paid, and we will explain this to you clearly before we get started. If there are any situations where a fee may apply, we will let you know upfront so there are no surprises. Our goal is to make sure you feel informed and comfortable throughout the entire process.
A mortgage broker acts as the go-between for you and a range of lenders, including banks, credit unions, and other financial institutions. Rather than you having to contact each lender individually, a mortgage broker does that legwork on your behalf. At First Home Loan Co, we take the time to understand your situation, your goals, and your budget before we start looking at loan options that may suit your needs. We handle the paperwork, communicate with lenders, and keep you informed every step of the way. Our role is to make the home loan process feel more manageable, so you can focus on the exciting part of buying your first home.
The timeline for a home loan application can vary depending on a number of factors, including the lender you apply with, how quickly documents are provided, and the complexity of your financial situation. In general, once you have submitted all the required documents, lenders can take anywhere from a few days to a few weeks to assess your application. At First Home Loan Co, we work to keep things moving by staying in regular contact with lenders and making sure your application is as complete and accurate as possible from the start. We will keep you updated throughout the process so you always know where things stand and what to expect next.
The First Home Owner Grant (FHOG) is a government initiative designed to help eligible first home buyers get into the property market. The grant amount and eligibility criteria can vary depending on which state or territory you are buying in, so it is important to understand the rules that apply to your specific situation. At First Home Loan Co, we can help you understand whether you may be eligible and walk you through the application process. We work with clients across Australia, including those based in Mentone and surrounding areas, so we are familiar with the requirements that apply in different parts of the country. It is always worth looking into what support may be available to you.
If you are thinking about building a new home or exploring construction loan options, First Home Loan Co is here to help. Book an appointment with our team today and let's find the right construction finance solution for you.
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