Construction loans | Mortgage Broker in Doncaster, Templestowe, and Eltham
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What is a construction loan?
Building or repairing your home is a labourious task, and at times you may need some financial support to keep the hammer cracking. In cases like this, construction loans are a great option commonly used to ensure that repair projects don’t fall dead in the water.
Construction loans are designed for those who are looking to repair homes they are currently living in, investment properties, or other properties they may use for living/investment purposes. Also known as building loans, construction loans are flexible and are familiar with the challenges of cash flow when major projects are in motion.
If you’re curious to see how a construction loan may be suitable for you, reach out to Anshul Aggarwal today, your local Mortgage Choice broker for Doncaster, Box Hill, and Diamond Creek.
How are construction loans more flexible than other loans?
When building or repairing a property, you will need a project plan and funding to enact that plan. Construction loans allow for flexible loan amounts that can be broken up and paid in intervals, aligning with the steps of a project plan.
Breaking up the total loan sum allows for the interest to account for only the withdrawn amount, rather than the total sum.
For example, let’s say a $100,000 construction loan was approved, and your first invoice for your construction was $20,000.
By only drawing up on the necessary $20,000 needed for the first invoice, interest only applies to that $20,000.
In contrast, if you drew out the $100,000 loan in one sum, you would be required to pay the interest on the $100,000, even though only $20,000 has been used.
If you’re interested in how a construction loan may benefit you in your next endeavour, reach out to Anshul on 0411 854 541
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