Construction & Turn Key
If you are planning on building a new home, there are two types of mortgages/loans Wright Financial provides - Construction loans and Turn Key Loans.
Our knowledgeable advisers are able to help you through the processes of selecting the most beneficial structure that will meet your or your builder’s specific requirements. Wright Financial is not directly aligned with just one particular lender or bank, we have access to most of the major lenders, giving our clients the most competitive rates, structures, and benefits.
Wright Financial new build loan benefits:
- Expert advice on which structure is best suited for your specific needs.
- Deciphering the jargon so our clients understand what is required and what to expect.
- Investigating all lenders rates and benefits to ensure our clients are getting the best deals.
- Ongoing communication and personalised advice every 6 or 12 months.
Wright Financial Advisers will help you through the entire process of building your new home, ensuring you understand what is required, and what to expect.
Construction loans initially operate as an interest-only facility with a variable interest rate during the construction period, before reverting to the standard home loan that we have negotiated on your behalf with your lender. The loan funds are paid out on milestones reached as the build progresses. You only pay interest on the money paid out. You don’t need to start repaying the total loan itself until the build is completed.
A construction loan requires three to four registered valuations by approved panel valuers. These will need to be paid for, at various stages of the build. Once your code of compliance has been issued, a final valuation is done with the final draw-down or retention amount released.
A construction loan is an interest only loan on the funds that are drawn down. When the home is completed the interest only loan is converted to a standard principal and interest loan unless other arrangements have been made.
Turn Key Loans
A Turn Key Loan relates to house and land packages which are marketed as a complete package at a pre-determined price, prior to the house being built.
The contract is in the form of a standard sale and purchase agreement with an accompanying fixed price contract between you and the building company. You will typically have to pay a 10% deposit at the point of signing the contract with the balance being payable on build and project completion.
Two registered valuations will be required to be provided to the lender. The first valuation is obtained before the build begins this is to ensure the completed build matches the fixed price contract and the second upon completion.
From a lenders perspective, with a Turn Key loan (which is a common high loan to value ratio), the sale and purchase agreement must provide for the house to be fully completed with the code compliance certificate issued. Chattels down to clothesline, letter box, retaining walls, and fences (if applicable) are to be in place. Wright Financial will be work with you to ensure all aspects of your contract have been covered, making any speedbumps during the process far less severe.