If you're considering purchasing a house & land package in Eltham, you're probably wondering how construction loans work and what's involved in the process. As experienced Finance & Mortgage Brokers at Premier Path Finance, we understand that buying off the plan or starting a new build can feel overwhelming. Let's break down everything you need to know about construction loans and how they can help you secure your dream home.
What Makes Construction Loans Different?
Unlike traditional home loans, construction loans operate on a progressive drawdown system. This means you only charge interest on the amount drawn down, rather than the full loan amount from day one. The lender releases funds in instalments as your build reaches various stages of the project, following a Progressive Payment Schedule that aligns with construction milestones.
This structure offers significant advantages:
• You save money during the building phase with interest-only repayment options
• Progress payments are released directly to your registered builder
• The loan converts to a standard home loan once construction is complete
• You have access to Construction Loan options from banks and lenders across Australia
Understanding House & Land Packages in Eltham
House & land packages are popular in Eltham because they offer a streamlined approach to building your new home. You purchase the land and house design together, often with fixed price contracts that provide certainty around costs.
Before committing to any package, consider these factors:
- Council restrictions and regulations - Eltham has specific building requirements you'll need to meet
- Suitable land - Ensure the block meets your needs and any council plans
- Price range - Factor in additional costs beyond the base package price
- Ideal location - Consider proximity to schools, transport, and amenities
The Construction Loan Application Process
Applying for a loan through Premier Path Finance involves several key steps. Our team will help you access Construction Loan options from multiple lenders to find the right interest rate and loan amount for your situation.
Here's what you'll need:
• Signed contract for your house & land package
• Council plans and permits
• Builder's licence and insurance details
• 'As if complete' valuation of the finished property
• Evidence you can commence building within a set period from the Disclosure Date
The streamlined application process we offer means less paperwork and faster approvals, so you can focus on planning your new home.
How Progressive Payments Work
Construction loans release funds based on building progress, typically at these stages:
- Deposit and land purchase - Usually 5-10% of total project cost
- Slab down - Foundation completion
- Frame stage - Structural framework complete
- Lock-up stage - Roof, windows, and external doors installed
- Fixing stage - Plumbing, electrical, and internal fittings by qualified plumbers and electricians
- Completion - Final inspection and handover
Each payment requires an inspection to confirm the work meets standards before funds are released to pay sub-contractors and suppliers.
Additional Costs to Consider
When you make a plan for your house & land package, factor in these potential expenses:
• Progressive Drawing Fee - charged each time funds are released
• Out of Contract Items not included in your base package
• Additional payments for upgrades or variations
• Council fees and connection costs
• Landscaping and driveway completion
Some buyers choose to demolish existing property on their land, which adds another layer of complexity and cost to consider.
Converting Your Construction Loan
Once your build is complete, your construction loan typically converts to a standard home loan. This transition usually happens automatically, but it's worth discussing repayment options with your Finance & Mortgage Broker to ensure the ongoing loan structure suits your needs.
If you're planning major home renovations instead of a new build, similar principles apply. A home improvement loan or renovation Mortgage Broker can help structure finance for substantial upgrades to existing properties.
Why Choose Professional Guidance?
Construction loans involve more complexity than standard home purchases. Working with experienced Finance & Mortgage Brokers means you'll have support throughout the entire process, from initial application through to completion.
We help Eltham residents understand their options, compare different lenders, and secure appropriate loan amounts at competitive interest rates. Our local knowledge of council regulations and building requirements in the area adds value to your experience.
Whether you're a first-time builder or have experience with property development, having professional support ensures you understand each step and avoid potential pitfalls.
Ready to explore construction loan options for your house & land package in Eltham? Call one of our team or book an appointment at a time that works for you. At Premier Path Finance, we're here to help you turn your building dreams into reality with the right financial structure in place.
