Home Construction Finance Guide - Everything you need to know
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Home Construction Finance Guide Everything you need to know
How does ST finance work when building a new home?
S
S
When building a new home
there are many moving parts to
your financial set-up. Therefore,
it’s in your best interest to have
your finance plan completed
early on in your building journey
and put together by people who
understand the process.
S
BUYING AN
EXISTING HOME
• 1 Contract
LAND BUILD
VS
SALE
• Deposit + One Large Payment
• All Completed in 6 Weeks
LAND
VS
SALE
BUYING A
NEW HOME
LAND BUILD
VS
SALE
• 2 Separate Contracts Working Together
• LAND: Deposit + One large Payment
• BUILD: Deposit + Multiple ‘Progress Payments’
• Completed Over Longer Period (Approx 12 Months)
Exclusive
Benefits
That you won’t
find at any bank
ST
REAL
1. We can offer wholesale
interest rates that save
can access your documents
without you having to lift
CUSTOMER
you money. a finger. This gives you a STORY
huge advantage which not Joe is retired, and his wife Rita is
only saves you time, but working part time. They owned
2. Trusted by the Australian makes the whole process their current home outright and
Government to have exclusive of finance and construction wanted to buy land. With a plan
access to the First Home easier on you. to sell their current home once the
Loan Deposit Scheme for build was complete, pay out any
first home buyers. If your borrowed money and only have to
bank isn’t approved, you can’t 6. We can issue your Authority move once.
access this. If they are, you to Commence Construction
They went into their bank’s local
are reliant on their approval (ACC) as soon as we get
branch to speak to someone
timelines to secure your place. formal approval. Banks will
about their loan options, and were
We can control the loan only issue this after you have
provided with a pre-approval to
approval process in-house, your building approvals,
buy the land and build their new
giving you the best chance which can take months.
home. With the land due to register
to secure your place. However through our service,
in 3 months, the couple’s builder
once approved you’ll move
recommended they speak with us
straight to the construction
for a second opinion.
3. You could save up to list, and not back to the bank.
$12,000, as MyChoice No other lender can do this. We advised that their bank doesn’t
Pays* the interest on your offer the loan structure they require
construction loan while you (to borrow funds for construction
build. This allows you to 7. With us, you have one point and then sell their current home
reallocate these funds while of contact for the whole afterwards), and recommended
finishing off your new home. life of the loan. Your Loan they approach their bank to get
Manager is with you from the some clarity around what their loan
initial conversation through plan was.
4. If you want to stay in your to the key handover. So if Their bank then informed them that
current home while you there are any issues, your they couldn’t structure the loan as
build, sell on completion manager will know exactly planned. Instead, they advised the
and use the funds from the how to help you – because couple that they could lend them
sale to lower or eliminate they know you. This personal the money to build their home,
your new loan, we offer a journey is not something however they would need to buy
complete solution with our you’ll find at the bank; the the land first. This made no sense!
Transition Loan and Go- person who sells you the The customers didn’t have the
Between Loans. You’ll be loan at the bank is not the money they needed to buy the land
in your new home earlier same person who handles themselves. Without the land, they
without needing to sell your your progress payments. couldn’t build. Had the bank not
current home first, and you’ll listened to them at all?
only need to move once!
This couple was in a better position
8. Unlike banks who wait for
than most. They were simply
you to contact them to get a
looking to borrow funds on a
5.
We partner with the MJH better deal, when you move
short term basis (up to 18 months
Group, so if you build into your new home, we’ll
maximum), with the intention
with any of their trusted complete an assessment of
to pay back the loan in full once
brands we’ll be here your current loan structure
they sold their current home.
for you throughout the and interest rate to make
We assisted the customer with a
entire process - including sure you are still getting the
Transition Loan with No End Debt
construction. Through best loan in the market. Your
which allowed them to do exactly
our contacts, we’ll know best interests are always our
as they had planned – move once
exactly where you are in top priority throughout the
with no stress.
your building journey and life of your loan.
Joe & Rita, Sydney NSW
*See back page for important information.
Steps to get
you into your
new home sooner
How we work with your builder
mychoice finance plan
Real Borrowing Capacity
1. Assessment
Find out how much you can really borrow and
what needs to be included in your tender.
Your Free Tender
A house you can afford with all
2.
the inclusions you need – already
budgeted for so you are in control.
3. Construction Assessment
A full and thorough assessment including
LMI approval to give you confidence to
pay your Acceptance Fee.
Accept Your Tender
You can now proceed with your builder
4.
to bring your new home to life.
Plans, Colour Selections & Contract 5.
Confirm your construction plans, sign your building
contract and complete your external & internal colours
to finalise your new home requirements. MyChoice Order Valuation, Complete
Home Loans have internal access to everything
we need so you don’t have to chase any documents.
6. Formal Assessment & Issue
Authority to Commence
Construction
The full scope of your build is known so
Obtain Building Approvals
Development Approval (DA) through your local
7. that valuations & formal assessment can be
completed accurately and at the right time.
Council or Complying Development Certification
(CDC) via a Private Certifier is complete. You We may be able to issue your ACC now – we
now have everything you need to get building! are the only lender who has the ability to do
this – unlike banks, we don’t need to wait until
8.
you have building approval.
Join the Construction List
Your new home is ready to begin construction.
Building will start within 20 working days.
Congratulations!Reasons to
leave your
bank behind
What others often get wrong
& how we give you control,
as the construction specialists
REAL Generic Solution Customised
CUSTOMER Banks & Brokers Solution
STORY HOME LOANS
Before speaking with their builder, 1. Generic, system generated We complete a full assessment
Michael and Tracey purchased land calculators: of your Real Borrowing
and had their borrowing capacity Capacity, addressing all the
and pre-approval completed by a • All income is accessed as intricacies with construction
one lump sum finance. We consider how your
broker on behalf of a bank.
• An ‘estimate only’ income is made up (salary,
Land registration was 6 months commission, overtime, bonus)
assessment of living
away when they deposited on their and take an in-depth look
expenses is provided.
new home build. They completed at your real living expenses
their final building tender, colour The same calculator is used to get a true account of
selections and signed the building regardless of loan type. your position. You can start
This quick overview of your looking for a home you can
contract, and went to their broker to
position could affect your comfortably afford, with a loan
have their loan formally approved 2
eligibility for some loan that is right for your personal
weeks before land was due to settle. types when it comes to the circumstances.
The broker advised that the bank full assessment at formal
would not approve their loan, due to approval stage.
the area they were building on being
a restricted postcode listed with the 2. Basic pre-approvals will By completing a proper
bank’s Mortgage Insurer. They would only ever give you a basic assessment and finding you the
now need to put in a 20% deposit overview of what you can right loan structure, the amount
down, instead of the 10% they had borrow. This sets limitations you can borrow can vary in
ready to go. In summary the broker on what you can build your favour quite significantly.
told them to ask their builder to without understanding the This could be in the value of
reduce their build price or go to whole picture. over $100,000, just from finding
the right loan type or lender for
another cheaper builder as the loan
your personal situation.
couldn’t be approved. Suddenly,
the couple couldn’t complete their
land purchase and risked losing 3. Lenders Mortgage Insurance We will seek LMI approval
their deposits on both the land and (LMI) approval isn’t completed as part of your Construction
the build. until formal loan approval, Assessment before you accept
and while your loan may be your tender with your builder,
We assessed Michael and Tracey’s approved by the bank, this giving you peace of mind that
position and provided an option to third party approval may be this won’t hold you back later.
fund the land purchase and the full declined on something as
build. We were able to do this with simple as your postcode.
no changes by using a lender whose
Mortgage Insurer accepted the area
4. A
dvice on finishing costs like We help you plan ahead for
where they were building in – an
how to pay for Stamp Duty and everything as part of your
easy fix! completing your landscaping Construction Assessment so
Michael & Tracey, Hunter Region NSW are not often discussed at the that you won’t be left short.
pre-approval stage.Generic Solution Customised
Banks & Brokers Solution
HOME LOANS
5. L
and and construction We ensure that the land loan
loans not set up together is set up in preparation to
can make it difficult at formal work seamlessly with the
approval stage. Land finance construction loan. You’ll have
is easy for banks, but when a structured plan in place from
they come around to finally the beginning, so you can
setting up your construction proceed with confidence.
loan many months later, you REAL
may find yourself looking for
another lender.
CUSTOMER
STORY
6. O
ff the shelf, one size fits With access to the non-bank Our customers were doing a Knock
all loans with no wriggle lender MortgagePort, we Down Rebuild, dealing directly with
room mean the many factors can tailor a loan to suit your their existing bank of 20 years. They
that make your situation individual requirements and had begun the pre-approval process
unique, won’t often fit into a offer exclusive loan products, and were told they needed a valuation
standard loan without some which gives you more flexibility prior to depositing with their builder.
compromise. to build the home you want —
an offer you simply can’t find at Their builder advised them to speak
the bank. with us, as this didn’t sound quite
right. We went through their position
over the phone to find out exactly
7. N
o understanding of the Understanding the building what they wanted to do. It was clear
building process often leads process is second nature to they were given little or no advice
to the following errors when it us as we work directly with from their bank on the steps to fund a
comes to formal approval: your builder. Knock Down Rebuild. In order to have
equesting a copy of the
R he contract won’t be ready
T their loan approved, they were told
building contract and for a few weeks as firstly there they needed a quote from the builder
valuation as soon as you are reports to order and plans to order a valuation on the new build
have paid your deposit to finalise. Secondly, colour straight away.
using the builders quote, selections are completed to
provide a full picture of your We completed a Real Borrowing
rather than the contract,
new home. We won’t seek Capacity Assessment and
may restrict what you can
end up borrowing and how the valuation until this is all Construction Assessment on what
you can fund the whole complete and we can manage they were looking to spend. Through
build. Leaving you with valuation discrepancies if these this, we conducted research on where
the disappointing choice should occur, putting you in they lived and what equity they
of pulling out or finding the best position to build already had in their existing home,
more money. your home. gaining an understanding on the value
they were spending on their new build.
eeking formal loan
S While we have your best
interests front and centre, No upfront valuation was required
approval too early can
we make sure to include to work out what basic equity the
restrict any further
variations that many be everything you need to have customer had at the time.
required throughout the your loan approved in full, The customers were guided through
process. so you’re not left to find our detailed process and given
additional funds later.
confidence that they were in a position
to apply for their loan at the right time
8. W
aiting in the same MyChoice can approve your (once all documents and finalised
queue as people loan with your preferred costings for the Knock Down Rebuild
purchasing existing builder inhouse. We can also were obtained). A full valuation
property can prolong approve some loans on behalf on their intended build was not
your loan getting formally of the bank we work with, something the customer completed
approved by weeks. allowing for a more efficient before depositing with the builder,
and controlled process to get contrary to what their existing Bank
you into your home sooner. led them to believe.Applicant(s) Details
Applicant 1 Borrower Guarantor
Title Surname Marital status
Given name(s) Number of dependant children Ages
Address Nearest relative
Relative’s address
State Postcode
Owner Buying Renting/Boarding State Postcode
Period at address Years Months Relative’s phone
Previous address if less than 3 years Mother’s maiden name
Postal address after settlement
As above As property to be purchased
State Postcode Occupation
Period at address Years Months Date started Salary p.a. $
Home phone Work phone Employer
Mobile Fax Contact name Phone
Email Previous employer
Driver’s license no. Date of birth DD / MM / YYYY Occupation Term
Applicant 2 Borrower Guarantor
Title Surname Marital status
Given name(s) Number of dependant children Ages
Address Nearest relative
Relative’s address
State Postcode
Owner Buying Renting/Boarding State Postcode
Period at address Years Months Relative’s phone
Previous address if less than 3 years Mother’s maiden name
Postal address after settlement
As above As property to be purchased
State Postcode Occupation
Period at address Years Months Date started Salary p.a. $
Home phone Work phone Employer
Mobile Fax Contact name Phone
Email Previous employer
Driver’s license no. Date of birth DD / MM / YYYY Occupation Term
Corporate Applicant Borrower Guarantor
Company/Trust name ACN/ABN
Address State PostcodeAssets/Liabilities
Assets
ASSET VALUE
Home $
Other property 2 Rental @ $ per week $
Other property 3 Rental @ $ per week $
Other property 4 Rental @ $ per week $
Other property 5 Rental @ $ per week $
Bonds & savings $
Shares/Investments $
Superannuation $
Motor vehicles $
Business $
Personal effects $
Other assets $
Total Assets$ 0
Liabilities
BEING AMOUNT
LENDER REFINANCED OWING
Home loan 1 Repayment $ per month $
Home loan 2 Repayment $ per month $
Home loan 3 Repayment $ per month $
Home loan 4 Repayment $ per month $
Other loan 1 Repayment $ per month $
Other loan 2 Repayment $ per month $
Credit card 1 Limit $ $
Credit card 2 Limit $ $
Other liabilities Rent $ per month $
e.g. rent, HECS
Repayment $ per month $
Repayment $ per month $
Total Liabilities$ 0
Net Assets$ 0
MyChoice Home Loans Pty Ltd Authorised Credit Representative Number 485273 of Mortgageport Management Pty Ltd
Australian Credit Licence 386360 ABN 13 610 250 578 ACN 610 250 578. Edition 1. June 2020Standard Living Expenses
Expense Category Description Weekly Fortnightly Monthly Quarterly Annual Total Monthly
1. Childcare Day Care, After-school/Holiday Care, Nannies $ $ $ $ $ $ 0.00
2. Clothing & other Clothing, Footwear, Buy Now/Pay Later Purchases, Cosmetics, Hairdressing, etc
personal expenses
$ $ $ $ $ $ 0.00
3. Education Private/Public pre-school/School/Tertiary Fees, Books, Levies, Uniforms $ $ $ $ $ $ 0.00
4. Groceries Typical Supermarket – Food & Toiletries $ $ $ $ $ $ 0.00
5. Insurance Home/Contents/Landlord $ $ $ $ $ $ 0.00
Vehicle (Car, Caravan, Boat, Motorcycle) $ $ $ $ $ $ 0.00
Health Insurance $ $ $ $ $ $ 0.00
Life Insurance $ $ $ $ $ $ 0.00
Income Protection/Other $ $ $ $ $ $ 0.00
6. Investment property Rates, Body Corp/Strata & Land Tax $ $ $ $ $ $ 0.00
Expenses (new
purchase/existing) Utilities $ $ $ $ $ $ 0.00
Maintenance $ $ $ $ $ $ 0.00
7. Medical & Health Doctor, Dental, Optical, Massage, Chiro, Pharmaceutical, etc $ $ $ $ $ $ 0.00
8. Other Birthdays, Union Subscriptions, Gifts, etc $ $ $ $ $ $ 0.00
9. Owner Occupied Rates, Body Corp/Strata $ $ $ $ $ $ 0.00
Council Rates/Body
Corp fees (new Utilities (Renting/Owner) $ $ $ $ $ $ 0.00
purchase/ existing)
Maintenance $ $ $ $ $ $ 0.00
10. Recreation & Eating out, Alcohol, Tobacco, Gambling, Social, Holidays, Sport
Entertainment
$ $ $ $ $ $ 0.00
11. Telephone/Internet/ Phone/Internet $ $ $ $ $ $ 0.00
Media & Music
subscriptions Pay TV/Netflix/Spotify, etc $ $ $ $ $ $ 0.00
12. Transportation Registration $ $ $ $ $ $ 0.00
expenses
Petrol & Maintenance $ $ $ $ $ $ 0.00
Tolls/Taxi/Parking/Public Transport $ $ $ $ $ $ 0.00
Grand Total 0.00Talk to a
construction loan
expert today.
enquiries@mychoicehomeloans.com.au
www.mychoicehomeloans.com.au
Hunter Region Sydney South Coast
9B Huntingdale Drive, Suite 1, 62 Norwest Boulevard, 142 Lake Entrance Road,
Thornton NSW 2322 Baulkham Hills NSW 2153 Oak Flats NSW 2529
PO Box 340 PO Box 7994 PO Box 275
East Maitland NSW 2323 Baulkham Hills NSW 2153 Oak Flats NSW 2529
Ph (02) 4036 3600 Ph (02) 8311 4400 Ph (02) 4204 8800
ACT North Coast QLD
ASX Business Centre, Shop 3, 145 Horton Street 3926 Pacific Highway,
Level 1, Building 2, Port Macquarie NSW 2444 Loganholme QLD 4129
Corner Gladstone St & Tennant St, Ph (02) 02 5514 5500 PO Box 3220
Fyshwick ACT 2609 Loganholme QLD 4129
PO Box 1224 South Australia Ph (07) 2101 3937
Fyshwick ACT 2609
193–195 Port Road
Ph (02) 6145 0500 Hindmarsh SA 5007
Ph (08) 8292 7270
*IMPORTANT NOTICE: Available to approved applicants of MyChoice Home Loans Pty Ltd only. Approved applicants must enter into a construction
home loan and an Interest Subsidy Agreement with Mortgageport Management Pty Ltd (Manager). Offer i s n ot a vailable o n t he l and p ortion o f
the construction home loan. Eligibility criteria, fees, charges and T&Cs apply. This offer is only available when building a home with the MJH Group
Company; Newcastle Quality Constructions Pty Ltd ABN 82 003 687 232. T/A McDonald Jones Homes, Mojo Homes Pty Ltd ABN 31 166 754 696.
T/A Mojo Homes, Brighton Homes Queensland ABN: 59089 524 050. T/A Brighton Homes. Not available for bridging finance. Construction requirements
apply, which includes a requirement that funds are to be retained by lender and paid directly to the builder at each progress payment stage.
MyChoice Home Loans Pty Ltd Authorised Credit Representative Number 485273 of Mortgageport Management Pty Ltd Australian Credit
Licence 386360. MyChoice Home Loans Pty Limited is 50% owned by the MJH Group and as a result of introducing borrowers, may receive a
financial benefit as a result of its ownership in MyChoice Home Loans. ABN 13 610 250 578 ACN 610 250 578. Edition 5. November 2020You can also read
