1) How does a construction loan work?
The bank will require a fixed building contract that will be used along with an “on complete” valuation. The customer pays the equity portion and then the bank releases the funding. There are typically five progress payments and a 12-month term to complete construction. Any cost overruns during construction are for the customer’s account. Standard interest margins do not apply to land and construction loans and additional administration costs will apply.
2) Who organizes valuation?？
Valuations are completed by independent valuers from the bank. These are arranged by bank, with the cost being charged to the applicant.
3) Is the mortgage tax deductible on my tax return in Australia?
Yes. You will receive statements indicating interest paid on your mortgage for you to use in your tax return.
4) How long does the process take?
The loan application process generally takes 5-7 working days, providing all document s are accurately completed and supporting documentation is made available. The loan approval process will depend on the transaction. However, due to documentation being completed overseas, the FIRB approval and the council & developer approval of the building permit, you should be prepared for a minimum 10-12 weeks waiting period.。
