As a plasterer, you know construction inside and out. You've worked on countless projects and understand what makes a quality build. But when it comes to purchasing a multi-unit development site and securing the right construction loan, the process can feel like uncharted territory.
That's where having the right Finance & Mortgage Broker makes all the difference. At Tradie Home Loans, we specialise in helping trades professionals like you access Construction Loan options from banks and lenders across Australia.
Understanding Construction Loans for Multi-Unit Developments
Construction loans work differently from standard home loans. Instead of receiving the full loan amount upfront, you'll receive funds through a progressive drawdown system that aligns with various stages of the project. This means you only charge interest on the amount drawn down, which can save you thousands of dollars throughout the construction process.
Key features of construction loans include:
• Progressive drawdown as construction milestones are reached
• Interest-only repayment options during the building phase
• Funds released based on a Progressive Payment Schedule
• Progressive Drawing Fee may apply for each drawdown
Finding the Ideal Location and Suitable Land
Before applying for a loan, you'll need to identify an ideal location within your price range. Consider factors such as:
• Council restrictions and council regulations in the area
• Whether you'll demolish existing property or start fresh
• Development application requirements
• Access to utilities for plumbers and electricians
Remember, lenders will assess the land's potential based on council plans and permits already in place or likely to be approved.
The Application Process
When you're ready to make a plan for your multi-unit development, the streamlined application process typically involves:
- Initial Assessment: We'll review your financial position and discuss your loan amount requirements
- Property Evaluation: Lenders will conduct an 'as if complete' valuation to determine the finished project's worth
- Documentation: You'll need council plans, permits, and fixed price contracts from your registered builder
- Approval: Once approved, you'll need to commence building within a set period from the Disclosure Date
Managing Construction Payments
Construction loans are designed to pay sub-contractors and suppliers as work progresses. The Progressive Payment Schedule typically covers:
• Foundation and frame completion
• Roof and wall installation (where your plastering expertise shines)
• Internal fit-out stages
• Final completion and handover
It's important to note that Out of Contract Items not included in the original fixed price contracts may require additional payments from your own funds.
Interest Rates and Repayment Options
During construction, most lenders offer interest-only repayment options, meaning you only pay interest on funds already drawn down. This helps manage cash flow during the building phase when rental income isn't yet flowing.
The interest rate for construction loans can vary based on:
• Your deposit size
• The complexity of the development
• Your experience as a developer
• Current market conditions
Alternative Financing Options
If a full construction loan isn't suitable, consider these alternatives:
• Home improvement loan for major home renovations
• Buying off the plan if suitable projects are available
• House & land packages for simpler developments
Each option has different requirements and benefits, so it's worth discussing your specific situation with an experienced mortgage broker.
Why Choose Tradie Home Loans
As trades professionals ourselves, we understand the unique challenges plasterers face when expanding into property development. We work with multiple lenders to find loan products that suit your circumstances, whether you're an experienced developer or taking your first step into multi-unit construction.
Our team knows that your plastering business provides you with valuable insights into construction quality and timelines – assets that many developers lack. We'll help you present your application in a way that highlights these strengths to potential lenders.
Ready to explore construction loan options for your multi-unit development project? Call one of our team or book an appointment at a time that works for you. Let's turn your construction expertise into your next investment opportunity.
