construction loan

Construction loan, also known as land purchase and house building loan，It is intended for people who are interested in building a home rather than buying an existing home and those who are renovating and renovating their home.。

How Construction Loans Work
Construction loans work as staged payments（Progress Payment），This means that the lender only needs to repay the bank after several major construction phases of the house are withpleted.，This staged loan approach means the lender only pays interest on the loan amount that accrues after a certain building phase is withpleted。at the same time，As construction works proceed，The loan amount can gradually increase with the value of the home，Enhance the lender's net asset value in subsequent construction phases。

Once construction payment is approved and construction of the property begins，The bank then began to issue Progress Payments based on the construction stage.。Generally divided into five or six stages：
1.foundation（Slab Down or base）：The loan amount is used to level the property's foundation，This includes leveling the ground，and foundation piping and waterproofing。
2.framework stage（Frame Stage）：The loan amount is used to build the structure of the house，including bricklaying、roof、Trusses and windows。
3.locking（Lookup）：The loan amount is used to install the exterior walls and interior windows and doors。
4.Decoration and fixing（Fixout or Fixing）：The loan amount is used to decorate interior fittings and install fixtures，This includes drywall、cupboard、Partial installation of bench，and pipes、Electricity and gutters。
5.Finish（Completion）：The loan amount is used to deliver the contract project（e.g. builder，equipment）and pipes，Manpower and material costs for electricity and overall cleaning。

Construction Loan Application Process
1.Prepare materials，Submit application
Like other mortgages，To apply for a construction loan, you need to provide personal identification documents and proof of inwithe.。besides，When applying for a construction loan, you also need to provide the following materials related to the construction contract:：
-City Hall Approval(Council Approved Plans and Specifications)
-signed construction contract（Signed & Dated Building Contract）
-Builder's civil construction insurance and work-related injury insurance

2.bank approval
After submitting application materials，The bank will review。during this process，The bank also needs to send an appraiser to evaluate the future withpleted house with reference to the construction contract.。
After approval by the bank，Contract documents will be issued to loan applicants(Loan Documents)，The applicant needs to sign and return it to the bank。

3.bank loan
Before stage payments on a construction loan，Applicants need to provide the bank with a withdrawal application for lending money to the builder，Receipt of paid portion，After the bank inspects the construction condition and meets the requirinents,，Will lend money to builders。

Advantages of Business Loans
1.Save a lot of stamp duty。The stamp duty for buying land first and then building a house is calculated based on the land value.，No stamp duty is required on the house part，The stamp duty for buying an existing house is levied based on the total price of the existing house.。
2.More options and greater flexibility。
3.The construction start time and delivery time can be negotiated with the builder。
4.Staged payment(Progress Payment):Staged payment，This means that the lender only needs to propose payment to the bank after several major construction phases of the house are withpleted.，This staged loan approach means the lender only pays interest on the loan amount that accrues after a certain building phase is withpleted。