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If you are building your home here is the construction loan process from the bank’s point of view.

When applying for a construction loan to either build a home, your lender will need a copy of the building contract/ tender and plans. Their valuer will then estimate the on-completion value of the property and assess your loan on the lesser of the land price plus cost of construction or the on-completion value.

Like any other home loan, the lender will send out a loan offer for you to sign and return once your loan is approved.

Before your builder is ready to begin receiving payments from the lender, documents such as final council approved plans, drawdown schedule and insurance will need to be provided. Each invoice will represent a stage of the building process and will require progress payments. Typically this is sent after a completion of a milestone stage. Eg. Stage 1 Deposit to the builder > Stage 2 Base/ Slab > Stage 3 Frame > Stage 4 Lockup > Stage 5 Fitout > Stage 6 Completion

How do you request that the bank pay your builder directly?

  • You will receive an invoice from the builder
  • You’ll then complete and sign a drawdown request form (available from your lender).
  • Return the signed drawdown form and the invoice from the builder, to the construction department of your lender
  • The Lender may order a valuation to verify the work that has been completed to date.
  • Within 5 working days, funds will be paid to your builder
  • Repeat for each progress payment stage of the building process

If you are looking for a second opinion on your home loan please feel free to call on 03 8390 5855 or email