Construction - No Deposit Home Loans

News & Views - No Deposit Home Loans On Line

No Deposit Construction Home Loans
This type of home loan gives you the opportunity of Constructing the property of your dreams with your chosen specifications on a block of land of your choice.
More on No Deposit Construction Loans

Main benefit of this type of loan
The obvious benefit is that of savings made to Stamp duty Payments. Stamp Duty is paid on the value of the land purchased and not that of the Construction.
It is worth considering a No Deposit Construction Home Loan

 

 

 

 

 

 

 

 

 

 

No Deposit Home Loans – Construction Policy Guidelines

In this section we look at some of the general policy guidelines which define how no deposit construction home loans and 95% construction home loan work and what the lending institution requires from an information point of view.

Importantly we highlight some of the key requirements of the lending institutions when it comes to successfully applying for this type of home loan.

The policy and lending requirements are very similar to those of traditional home loans although there are some specifics with regard the construction component which if followed are your best bet in obtaining the right home loan for your needs and ensuring the home loan process runs as smoothly as possible.

To simplify the information we have condensed these policy guidelines into short points for your reference below:

All no deposit construction home loans require a fixed price building contract to ensure that costs to construct are set and will not blow out All no deposit construction home loans require a fixed price building contract to ensure that costs to construct are set and will not blow out
There are certain requirements of lenders when providing a construction home loan, some of these are items like fencing, paving, connected services or sealed roads for example There are certain requirements of lenders when providing a construction home loan, some of these are items like fencing, paving, connected services or sealed roads for example
These types of home loans are not available to owner builders These types of home loans are not available to owner builders
All construction home loans be it 100% or 95% require the applicant to provide a full set of financials from an income verification point of view i.e. payslips, group certificates, letters of employment All construction home loans be it 100% or 95% require the applicant to provide a full set of financials from an income verification point of view i.e. payslips, group certificates, letters of employment
Self employed people can apply and obtain these types of home loans although the requirement for a full set of verifiable financials still stand Self employed people can apply and obtain these types of home loans although the requirement for a full set of verifiable financials still stand
The advance of the first home owners grant can only be provided if a) the applicant is entitled to the grant, b) if the application is successful and c) that the application is provided to the accredited lending institution on initial application The advance of the first home owners grant can only be provided if a) the applicant is entitled to the grant, b) if the application is successful and c) that the application is provided to the accredited lending institution on initial application
Some construction home loan providers apply a loading on the interest rate during the construction phase where this reverts to the prevailing variable interest rate thereafter or the fixed interest rate available at the time Some construction home loan providers apply a loading on the interest rate during the construction phase where this reverts to the prevailing variable interest rate thereafter or the fixed interest rate available at the time
The location of the proposed construction needs to be within the postcode listing of the lender chosen, in the case that the location falls outside their preferred list there may be a restriction on the lending level provided The location of the proposed construction needs to be within the postcode listing of the lender chosen, in the case that the location falls outside their preferred list there may be a restriction on the lending level provided
The applicant needs to have a clean credit rating and applicants how have minor defaults will be reviewed on a case by case basis The applicant needs to have a clean credit rating and applicants how have minor defaults will be reviewed on a case by case basis
As part of the fixed price building contract, the items within the contract such as council approvals, specs and any permits need to be provided As part of the fixed price building contract, the items within the contract such as council approvals, specs and any permits need to be provided
Standard credit criteria apply in the form of credit checks, ability to service the home loan, debt to liability ratios and so on Standard credit criteria apply in the form of credit checks, ability to service the home loan, debt to liability ratios and so on
The completion of the dwelling generally needs to be finalised within six months of commencing construction The completion of the dwelling generally needs to be finalised within six months of commencing construction
You are able to purchase the land component first and construct at a later time although the general guideline is that construction should commence within 12 months of purchasing the vacant land You are able to purchase the land component first and construct at a later time although the general guideline is that construction should commence within 12 months of purchasing the vacant land

These are a general guide to the lending policies when it comes to construction home loans.

Bear in mind that each lender has slightly different lending parameters and it is best to have an in depth discussion with one of our home loan consultants who can narrow down the search and then provide you with detailed information on the construction home loan you will most likely select.

We are also able to provide with the appropriate comparisons and a construction checklist which is a great guide on what information will be needed. Contact us to find out more.


Useful Sites as a point of reference:
| Web Designs & CRM Systems | FBAA | More info on No Deposit Home Loans | Other Home Loan Options |