Construction Finance Brokers
Building a new property or renovating one can be exciting yet overwhelming. Obviously, it would require a huge amount of money. The reality is, only few can pay outright for the whole amount of construction. But that doesn’t mean you don’t have options. Are you aware that there there are construction finance solutions to choose from? Similarly, do you have an idea that there are construction finance brokers to help you?
What is Construction Finance?
For those who are fairly new to the concept, we’ll briefly explain what construction finance is all about.Construction finance means that the builder or property owner applies for a finance solution that will cover the cost of the the construction. It is considered risky and that is why the interest rates are usually higher.
Common Requirements for Construction Financing in Australia
Generally, lenders either bank or non-bank, will require the following when you apply for construction financing. Others might require fewer documents while some might ask for more. This depends on the institution you are dealing with.
A Good Credit Score
As always, a good credit score is necessary to get approved. This will give the lender an idea that you are responsible in paying your dues on time. Ideally, you should also present a proof of income to strengthen your claim that you have the capacity to pay them back.
An Established Contractor or Builder
You must be working with a credible general contractor that has a proven track record of constructing various projects.
Specifications of the Project
It is also important to provide a detailed specifications of the project. It should include the floor plan and even all the materials to be used in order to complete the structure. This serves as the basis for identifying how much is needed for the entire project. Thus, it is also crucial to have the building appraised based on the specifications provided.
Typically, you will be required by the lender to pay a down payment of around 20% – 25%. This gives them the assurance that you are invested or serious in completing the construction.
What Construction Financing Covers
This type of financing solution covers the cost of labor and materials for the construction project. It can also include the costs of permits.
Finding a Construction Finance Lender in Australia
It is always recommended to look for different lenders or institutions. You shouldn’t settle for the first one that offered a proposal as you would want to compare rates and packages. This might take a while and that is why we suggest that you work with a construction finance broker.
Why Hire Construction Finance Broker?
You might think that hiring a construction finance broker doesn’t make sense if you can do it on your own. However, there are advantages if you get one. Here are some of those:
It Saves You Time and Effort
Looking for the perfect lender for your construction needs isn’t exactly a walk in the park. You need to spend a lot of time and effort to do your research and to complete the necessary documents. If you have a lot of free time then by all means, go ahead and do it on your own. However, we understand that you have other responsibilities both on your personal and professional lives. Hence, you might want to focus on those instead and leave the construction finance application to the experts.
They are the Experts
Speaking of experts, construction finance brokers know what you need and what works for you. They already have the experience and can propose solutions right away. This buys you a lot of time and you can start your project as soon as possible.
What’s also great with hiring a construction finance broker is that you can learn a lot from them. Don’t be afraid to ask questions as you also need to understand the entire process before signing any document.
Construction Finance Brokers Have the Right Network
Lastly, these brokers have already established a good network among lenders. This allows them to identify which financial institution will work best for your needs.
What Makes a Good Construction Finance Broker?
Aside from having a good network, a construction finance broker should also be knowledgeable about construction per se. Of course, it is a given fact that he or she must understand the interest rates and payment terms of most lenders. But it would be a plus factor if they know even the intricacies of construction such as safety codes, legal documentations, and even local regulations.
How Do You Find the Best Construction Finance Broker in Australia?
But of course, we are not saying that all construction finance brokers are to be trusted. Reality is, there are some who would take advantage of you so you need to be extra careful. When choosing a construction finance broker, you can ask your friends and families for referrals. Don’t forget to check their portfolio and see if they have successfully worked with different clients.
With MHF, you are sure to deal with a reputable construction finance broker. They work with passion and they aim to help people achieve their dreams of building a new home or project.