A Construction Loan can make Your Dream of building a New Home a Reality

SYDNEY - Sept. 9, 2014 - PRLog -- The idea of building your new dream home can be both very appealing and very exciting. If you are deciding to build you new dream home, there are a lot of things you need to consider prior to commencing your building project, for example, you may have to decide:

>> Do you want to demolish the existing home you live in and re-build a new home?

>> Do you want to purchase vacant land and construct a new residential dwelling on the purchased land?

>> Do you have ready cash available to cover the construction costs?

>> Do you have to get a Construction Loan (also known as a Building Loan or Construction Mortgage) to fund your building project?

>> If you are a first home buyer, you will have to find out about the Government's First Home Owner Grant Scheme

Once you have decided on the above-mentioned factors, you will have to start your work on construction home loan or real estate finance which is secured by a mortgage on the property being financed.

Lenders/credit providers have different construction time frames and drawdown schedules that they allow for construction loans http://www.singhfinance.com.au/residential-finance/constr... . However, most are similar, and here is a quick synopsis of how a construction loan works:

>> The lender/credit provider will fund the loan amount required by you to cover the cost of purchasing the land and for the building construction costs

>> He/she will break down the loan amount into progress payment amounts drawdown, which are made to your builder as each stage of construction is completed

>> He/she will require the construction of your new dwelling to be completed in the short-term (usually from 6 months to three years)

>> He/she will take required real estate security by securing a mortgage on the property being financed

>> He/she will charge Interest Only during construction (interest is only calculated against that amount that has been drawn down)

If you are interested in a construction loan, then my best advice is to get a pre-approval with the help of an expert finance broker. He/she will help you to know and understand:

>> How much disposable income you will want?

>> How much will your building project cost?

>> How much cash (down payment) do you have to put into your building project?

>> How much can you afford to borrow?

>> Where can you score the best construction finance deals and products?

>> If you are eligible for the First Home Owners Grant scheme as a First Home Buyer?

Once you discuss these things with the finance broker, you will be able to judge your financial situation in a better light. It will aid the broker in finding pre-approved construction loan packages for you. You can start looking for a new location to build your dream home, or you can look at demolishing the existing home you live in to re-build a new home after obtaining pre-approval.

http://www.singhfinance.com.au will help you in fulfilling your dream of building home. Its professionally qualified expert finance brokers will not only help you in obtaining a construction loan but will also support you in finding loan protection insurance for your loan. Call on 0424 190 908 for getting pre-approved construction finance.