What Are The Five Phases Of Construction?

How Much Do I Pay At Each Stage Of A Construction Loan?

✅Most lenders have a requirement that you start within 6 months of approval and complete within 24 months.

✅Normally you pay your builder a 5% deposit for the purchase of building materials etc.

✅The construction will take place in agreed building phases.  Once the 5% deposit is paid the builder can get started.  The building will take place on a progress schedule.  The builder will invoice you at the end of each stage know as a progress claim.

Tell us your plans

Phase 1 - Clearing the site

✅20% of funds

✅Time frame: 1-2 weeks 

✅Initial deposit for builder to buy materials etc.  Normally 5%

✅Clearing the site, demolition, leveling the site or tree clearing.  Normally 15%

✅The slab is laid.  

Phase 2 - Framing

✅20% of funds

✅Time frame: 3-4 weeks

✅Framing of your structure, walls, electrical conduits, plumbing, roof frame, gutters and insulation.

Phase 3 - Lockup stage

✅20% of funds

✅Time frame: 4 weeks.

✅Your project is now at lockup stage: windows, doors and walls are completed.

✅Cabinet makers can start fitting out kitchen.

✅Plumbers & electricians can complete works.

Phase 4 - Fit-out

✅30% of funds

✅Time frame: 5-6 weeks

✅Finishing fit outs of electrical and plumbing: lights, power points, taps, shower fittings.

✅Kitchen cabinets, tiling etc.

Phase 5 - Completion

✅10% of funds

✅Time frame: 7-8 weeks

✅Painting, detailing, installations, carpets etc.

✅You are now ready to move in.

What about problems with the build?

✅Normally you have 3-6 months to notify the builder if there is a problem with the build or if something requires fixing.  Make a list as you go, and try to bring it up before the sign off at each phase.

When do I start paying off the loan?

✅You'll be making almost full mortgage repayments before you take possession of your home.  This is because funds are released via the lender as the building takes place.

✅Get full legal advice before signing a building contract.  It's important to pay the builder in stages that fits with the amount of work done.  In recent years some large building companies have asked for more of the funds in the earlier stages of the build.  This puts you at greater risk in the event of the builder going out of business.  You're also making greater repayments as more funds are released!

Mortgage Broker Revesby can help with your construction!

✅We'll try to ensure the process is smooth.

✅Full guidance on the draw down process.

✅Borrowing capacity and loan selection.

✅No service fee charged.

Tell us about your project

No fee

Matthew Stack

matthew@mortgagebrokerrevesby.com.au

www.mortgagebrokerrevesby.com.au

0423 237 242

#mortgagebrokerrevesby #mortgagebrokersydney #constructionloan #homeloan #phasesofconstruction #buildingloan