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We can advise you about all your home and investment loan options. Obtaining the right home loan finance is probably the most important task of a property purchase.

Choose a Loan

Build or Renovate a Home

Build or Renovate a HomeFinancing a major renovation or building a new home is very different from buying a property or completing non-structural improvements. Construction loans are available for building or renovating a new home or an investment property. Owner builder construction loans are available.

Some construction loans allow for major renovations and structural changes to an existing property. If a council approval is required for renovations to a house, normally a construction loan is needed.

Universal Wealth Management can help to find a loan to suit construction plans and financing needs.

The difference between a construction loan and a standard home loan is that a construction loan is usually drawn down in stages instead of a lump sum payment being made at the initial settlement.

For example with a land and construction loan, progress payments are made to coincide with the initial purchase of the land followed by a number of key construction stages.

Construction loans help to purchase vacant land, construct a residential property on land already held or complete the land purchase and construction. A construction loan minimizes repayments on the finance until construction or renovation is complete. A variable interest rate loan is used to pay the builder in stages.

During the construction period loan repayments are calculated on an interest only basis. The repayment is the interest calculated on the amount that has been paid out of the loan account. The payments to the builder from the loan account are called "draw downs" or "progress payments". Draw down stages allow payments to be made in stages; this protects the borrower by ensuring the builder does not get paid for work that has not yet been completed to a satisfactory standard.

Typical stages and percentages for a fixed price building contract where a progress payment will be made are deposit 5%, base stage 20%, frame stage 25%, lock-up stage 25%, fixing stage 15%, and completion stage 10%. Completion stage usually is when the certificate of occupancy is issued by the local authority.

The credit provider will use a valuer to assess the land and planned construction. Progress payments are only made when the builder has reached certain objectives and met the required standards. The credit provider controls the payments to the builder through invoices issued to the borrower by the builder. The borrower has to sign the invoice to confirm that they are happy with the work completed. When the signed invoice is received the credit provider usually then pays the builder directly by electronic means or by bank cheque.

When the final progress payment claim is submitted, the credit provider will arrange for a qualified valuer to complete a final inspection and valuation of the property to confirm that the construction has been carried out in accordance with the contract before they release the final progress payment to the builder.

A construction loan is usually converted to a traditional loan once the construction is completed and the loan has been fully drawn down.

We will complete a side-by-side comparison of interest rates and charges from the most competitive and reputable lenders for any construction scenario.

Money is a Tool

"Money is a tool, a basic instrument of exchange
Finance relates to managing money and money resources
Wealth is a product of using resources wisely"

-Maria Rigoni, Director