Pre-construction - Part 3 Finance & Settlement
After your Building Contract and Selections Consult, variations are finalised they are then lodged with your bank/broker to arrange unconditional finance approval for your home loan. At this time, you will need to ensure that land settlement has been organised and has taken place with your settlement agent. Formal finance approval also needs to have taken place to move forward with the building of your new home.
Structural & Energy Certificates
Once the plans have been finalised, we will also need to apply for relevant structural certifications and energy assessments as required by the local government for a building permit. When we have received the relevant certifications, the plans and certifications are submitted for Certificate of Design Compliance (CDC). During the CDC process the plans and specifications are assessed for compliance with the National Construction Code (NCC or BCA) and Australian Standards.
Shire Application
After we have received the relevant certifications and assessments, we can then submit the plans to the local council to apply for a Building Permit. The Building Permit provides us with permission to begin the construction of your dream home!
Once we receive the Building Permit and Developer Approval we are able to issue you and your Site Manager with the Final Plans, Selections Consult variations and Addenda for your new home.
Before the Construction Phase
Before you proceed to the Construction Phase, the following items will be completed:
- Building Contract signed with your New Homes Consultant
- Selections Consult complete and variations signed by client
- Unconditional finance approval
- Settlement of land
- Developer approval (if required) e.g. home’s front elevation, colour selections
- Building Permit approved by Local Council
FAQs
Construction loans are quite different from regular home loans. Unless you’re aware of all the differences, and confident in their application, you should really get advice from someone who is. With construction loans, the most obvious distinctions are the payment for the land and the progress payments to the builder. Clearly they’re not considerations with a regular home loan. But they’re just the start of the differences. And it’s quite niche as in Australia, only 8% of loans are for construction. That’s one of the reasons why Celebration Homes has partnered with construction finance specialists Resolve Finance where 80% of their business is in construction loans.
If you want to borrow more than 80% of the property’s value, you will need to pay Lenders Mortgage Insurance (LMI). Mortgage insurance is a one-off payment, usually made when you settle on the property. The amount you pay depends on the loan amount, the value of your property and how much of the purchase price you want to borrow (e.g. 95%). It protects the lender in the event that you can’t meet your repayments and the home is sold with the debt outstanding.
Resolve Finance also has access to a unique loan, called Parent Assist, that can help you save thousands in mortgage insurance. It works like this; your parents loan you up to 20% of the property’s purchase price. Bluebay Home Loans provides the rest. You repay them with interest like any other official loan but at half the rate of your home loan. When the house is sold, you repay your parents (or you can repay them sooner if you choose to make extra repayments).
For full information on this product please view the Parent Assist Information Statement at parentassistloan.com.au which details the full terms and conditions of the loan. Bluebay Home Loans Australian Credit License No. 389250
A conveyancer or settlement agency prepares all the necessary paperwork and legals, when you buy and/or sell a home. This includes changing the name on the title deeds of the properties involved, organising the adjustment of shire and water rates on your behalf, and liaising with all the relevant parties involved in the home purchase settlement process.
Celebration Homes is partnered with Axiom Conveyancing who can assist you with your settlement. As part of the ABN Group Axiom Conveyancing will help make sure your land settlement goes smoothly and there are no unnecessary holdups. They are specialists in construction settlements and know what is needed by who and when to keep things moving for you. As a Celebration Homes client you will also be eligible for a 20% discount.
As a fully incorporated law firm, they’ll also be able to provide an extra layer of comfort that standard settlement agents can’t. So you get the added security that an in-house legal practitioner provides if any issues arise. Plus they also do estate planning, wills, power of attorneys and more.