How to Apply for Owner Builder’s Loan Australia

If you are building your own home, then you may meet difficulty funding your project through a bank. Owner builder loans in Australiaare available for people who wish to take on building their house without appealing a licensed builder. In order to comply with this, one needs to submit his building plans to his local council and be approved the suitable building permits.

How much can you borrow
-95% of the project cost: If you’re a certified builder building your personal property.

-80% of the project cost: If you’re not a builder, you must have offered 20% of the cost of construction as cash, equity in another property or a gift from your parents just in case you go over your budget.

For all of the lenders, there are some papersnecessities that need to be satisfied. Most lenders will need the following:

1.Full income verification.

2.3-6 months’ savings and/or loan statements showing good conduct and satisfactory equity to contribute to the cost of the build.

3.A Copy of your stamped plans and building permits.

4.Detailed estimation of your construction costs.

5.Detailed timing schedule of works to be completed.

6.ACopy of the soil test and amountreviewers report.

7.ACopy of your public liability and other insurances policy documents.

Once you’ve given the bank all of the papers they require, it’s then a matter of submitting your application and waiting for approval.Once your loan is in place, you can start drawing down on the funds as you go.

Tips when applying for a builder’s loan

Tip #1: Make sure you have a valid license.

Tip #2: Consider pre-approval before getting into the owner-builder arrangement

Tip #3: Make sure you have all the necessary insurance policies as a builder

Tip #4: Create the owner builder’s cost estimate before being approved

Tip #5:Compare notes from different builders and also take note of inclusions

Tip #6: Insure the property first before the bank finalizes payment