Building you dream home is an exciting venture, however can be very confusing. Get it wrong and the consequences can be costly and long lasting. We have put together the process below in order to try and assist those looking to build their new home. Please keep in mind this a guide and things can change along the process.
Many builders and land agents will have their own finance arm. At HBF Finance we recommend having your own independent finance broker whom will work for your benefit and guide you along the process.
If you have any questions please feel free to Contact Us and we’ll be happy to assist.
A summary of the Building/Construction Process for house & land packages
| Step | Client | Lender | Land Agent | Builder |
|
1 |
Apply for Finance Pre-Approval to confirm
|
Finance Pre-Approval issued.Typically current for 60-90 days.
Loan Conditions disclosed |
|
|
|
2 |
Visits to New Home Estates and Display Homes. Talk to Builders and Land Agents to find house/land packages that fit their budget. | |||
|
3 |
Decide on House Plan and block of land.Meeting with Land Agent to sign land contract and pay deposit. Meeting with Builder to discuss house plans and pay deposit. | Prepares Land Contract for clients to sign and receipts deposit payment.Land Contract subject to finance, maximum 4 weeks.
Forwards copy of Land Contract to the Builder together with Soil Report and Contour Survey. |
Meetings with clients to:
|
|
|
4 |
Apply for Conditional Loan Approval.Provide Lender with:
|
Converts Loan Pre-Approval to Conditional Loan Approval subject to:
|
Receives copy of Conditional Finance Approval Letter.Final Approval will be required within maximum 4 weeks.
|
Receives copy of Conditional Finance Approval Letter and issues:
|
|
5 |
Provide Lender with:
|
Unconditional Finance Approval issued.FHOG Application processed (if applicable).
Mortgage and loan documents issued. Land booked in for settlement. |
Receives copy of Conditional Finance Approval Letter and books in settlement date. | Receives copy of Conditional Finance Approval Letter.Lodges Plans with Council for Approval.
Applies for Building Approval. |
|
6 |
Meet with Builder to decide on internal and external colour selection. | Loan partially drawn down to complete land settlement. | Land Settles and ownership transfers to clients. | Meet with clients to decide on internal and external colour selection. |
|
7 |
Start making interest only payments on loan. | Construction commences | ||
|
8 |
Approve Builder Progress Payment Claims | Pay builder’s progress payment claims as authorised by clients. FHOG payment released at First progress payment (subject to lender) | Base Complete 15%Frame 20%
Enclosure 30% Fixing 30% Practical Completion 5% |
|
|
9 |
Final inspection of house with builder.Arrange building insurance cover.
Arrange connection of services. Book removalist. Move In. Commence making P&I loan repayments. |
Loan fully drawn.Now converts to P&I repayments.
Final settlement letter issues. |
Final inspection of house with clients.Certificate of Occupancy issued. |
