Construction Home Loans
Planning to build a new home or making substantial changes to the existing one, looking for land and construction loan, look no further, we at VURA Finance have team expert mortgage brokers that help find the lender and a construction home loan.
Understanding Construction Home Loans
A construction home loan is a type of home loan that people require if they are building a house or doing a substantial renovation of their existing home. A construction home loan is different from basic home loan, in construction loan the amount is paid in instalments (draw-downs or progress payments) to the builder by the lender upon completion of each construction stage.
To understand about construction home loan lets consider a scenario, suppose a vacant piece of land. You are thinking of building your dream home need $400,000 for it.
You have 100k saved as deposit for your new home, you now need construction home loan for building a new home value $300,000. Depending upon the lender you might have to pay LMI (Lenders Mortgage Insurance).
During the construction process, the money will be paid to builder by lender at the end of each stage. During the construction, you will only the interest of the amount that is released by lender to the builder.