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Land and Construction Loans

A loan for land and construction provides funding for building property

A loan for land and construction provides funding for building property or an extensive renovation so that during the construction phase, you have the least possible repayment.

Land and construction loans generally function as variable interest-only facilities over the construction period before returning to your lender’s standard home loan package. During the construction or construction period, you only pay interest on or paid out the home loan part.

You generally use regular home loan brokers for a residential home loan and not a construction loan to finance your purchase if you look at a house and land package.

What type of loans can you use to finance property construction?

Most loans can be used to finance the construction of the property. The only difference is that you may not have access to all your loan features, and repays generally are interest-only during the construction phase.

How do construction loans work?

Most building loans have a variable rate of interest, but there are some available for fixed-rate loans. If you use a fixed rate construction loan, you may have a single rate on your land loan and a second rate on your building loan.

What’s the construction process?

The construction of a new house or significant refurbishments can vary substantially between projects.