Your Guide to Financing Your Build THE STEPS YOU NEED TO TAKE, DEPENDING ON HOW YOU ARE FUNDING YOUR BUILD
Getting your finance in place is a critical step in your building journey. Whether you are using a construction loan, your own funds, or a combination of both, all finance requirements must be finalised before work can start on site.
This guide explains how we will support you through the finance process and outlines the requirements that need to be in place before construction of your new home can begin.
Helping you navigate the finance side of your build Support from construction finance experts
A dedicated Finance Liaison When you sign your Building Contract, the finance support we provide will depend on how you are funding your build. If you are financing through Loan Market Elevate, their team will manage your finance requirements from start to finish. If you are self-funding or using another broker or lender, you will be supported by a dedicated Finance Liaison. They will be your main contact for finance-related matters and will get in touch once your Home Owners Warranty (HOW) insurance is received to explain the support they will provide, including: → Expert guidance based on how you are funding your build. → Working closely with you and your Pre-Construction Customer Service Consultant (CSC) to ensure all finance requirements are in place so construction can begin. → Liaising with your broker or lender if needed. → Helping ensure progress payments are made promptly during construction so your build stays on track.
With so much to manage in the early stages of your building journey, finance can sometimes take a back seat. That is why Loan Market Elevate, our preferred finance partner since 2015, is here to support you. Based at our Norwest Head Office, they specialise in construction finance and understand our process, requirements, and timelines. They will connect with you at your Tender and Building Contract presentations to outline what is required depending on how you are funding your build. Their role is to ensure you know exactly what needs to happen and when so you are finance ready by the time you sign your Building Contract. If you are still exploring your finance options, Loan Market Elevate can also assist. Their team will provide expert advice and help you find a solution that suits your needs. If you choose to finance through them, they will liaise directly with your lender and our team, so you don’t have to act as the middle person, making the finance side of your build easier to manage.
Speak with Loan Market Elevate today! homefinance.support@loanmarket.com.au 02 8850 9040
Finance requirements for your build What you need to do, based on how your build is financed
How you fund your build will determine the steps you need to take before construction can begin. The information below outlines what needs to happen and when, whether you are using a lender or paying with your own funds. If you are financing your build through Loan Market Elevate, their team will coordinate directly with your lender and our team. This means they will manage the below on your behalf, so you can focus on building your new home. If you’re using your own lender or broker For customers not financing through Loan Market Elevate
1. Pre-Approval – We recommend having your pre- approval in place before or at the time of signing your Building Contract. While pre-approval is not a formal loan approval, it is an important step in the process and gives you an understanding of your borrowing capacity. 2. Conditional Loan Approval – Once your loan application is assessed, your lender may issue a conditional loan approval. This means your loan has been approved in principle, but certain conditions must still be met before they can issue unconditional approval. Some of these conditions may include documents that we will provide in your Bank Pack, such as your signed Building Contract, architectural plans, and evidence of your 5% deposit. You may also need to provide other supporting documents such as updated payslips or bank statements. 3. Bank Pack – After you have signed off all your Studio selections and quotes, your Finance Liaison will compile and send you a Bank Pack. This includes the key documents your lender typically requires to move from conditional to unconditional loan approval. We cannot issue your Bank Pack until your selections and quotes are finalised, so it is important
In addition to our documents, your lender may need other information such as: → Evidence of income and savings → A bank valuation of your land and future home → Quotes for items outside of your Building Contract, for example, landscaping and driveways 4. Unconditional Loan Approval – Before any work can commence on site, your unconditional loan approval must be in place. To secure this, send your Bank Pack to your broker or lender, along with any additional documents they need, as soon as you receive it to avoid delays. 5. Final Reconciliation & Progress Payment Schedule Prior to construction commencing, we will issue your final reconciliation. This document confirms your total build cost and includes an updated progress payment schedule which outlines the new total for each payment. You must forward these documents to your broker or lender as soon as you receive them. This allows them to align your loan payments with the updated schedule, helping avoid any delays in releasing funds during construction. Your payments are staged across key milestones during construction. Each payment is a percentage of your total build cost: 1. Deposit payable after contract signing and on receipt of HOW insurance (5%) 2. Completion of concrete slab (20%) 3. Erection of frame and roof trusses (25%) 4. Completion of brickwork/Hebel (20%) 5. Commencement of internal linings (20%) 6. Practical completion; all major building work complete, excluding minor items (10%)
to prioritise this step to avoid delays. Your Bank Pack typically includes: → Your signed Building Contract → Current architectural plans
→ Builder’s insurances → 5% deposit receipt → Any changes made after the Building Contract is signed (referred to as post-contract variations) → Your DA or CDC approval → An interim reconciliation showing the current contract total (including post-contract variations), along with an updated progress payment schedule
What we need from you Before work can begin on site, your Finance Liaison will need to confirm your loan is unconditionally approved and will cover your total build cost. They will ask you to provide: → A copy of your unconditional loan approval in the name(s) of the Building Contract signatories. → Confirmation of the loan amount allocated for your build (excluding land, refinance, Lenders Mortgage Insurance (LMI), or other third-party costs). → If your loan does not cover the full build total, we will need a current bank statement showing available funds to cover the shortfall (no older than 30 days). Please note, we cannot accept loans approved on a ‘cost to complete’ basis. Your lender must agree to our progress payment schedule. We also won’t accept share portfolios and other investments as proof of funds.
If you’re paying with your own funds For customers self-funding all or part of their build
If you are funding your build with your own money, the finance process involves fewer steps. Prior to construction commencing, we will issue your final reconciliation and progress payment schedule. These documents confirm your total build cost and outline the new total for each payment.
What we need from you Before we can begin construction, you will need to provide proof that you have sufficient funds to cover the total build cost. This can be shown with: → A current Australian bank statement or screenshot (no older than 30 days). The account must be in the name of at least one Building Contract signatory but cannot be in anyone’s name that is not a signatory. → For term deposits, the funds must be accessible before maturity to ensure prompt payment. → If using funds from a redraw account, you must provide a bank statement confirming the required funds are available. Please note, we cannot accept share portfolios and other investments as proof of funds.
Finance requirements at a glance
REQUIREMENT
APPLIES TO
PROVIDED BY
TIMING
Before or at the time of signing your Building Contract
Pre-Approval
Finance customers
Lender
Issued between pre-approval and unconditional approval to outline the loan requirements Once your Building Contract is signed and HOW insurance is received from your Pre-Construction CSC Issued each time a post-contract variation is raised listing the current build total. Finance customers must send to their broker or lender Sent after all Studio selections and quotes are signed off. Must be sent to broker or lender
Conditional Loan Approval
Finance customers
Lender
5% Deposit
All customers
You
Interim Reconciliation
All customers
Clarendon Homes
Bank Pack
Finance customers
Finance Liaison
Unconditional Loan Approval
Must be in place before construction can begin
Finance customers
Lender
Issued when construction of your home is ready to start to outline your final build total
Final Reconciliation
All customers
Pre-Con CSC
Must be provided before construction can begin
Proof of Funds
Self-funded or shortfall
You
Payments due during construction, based on the progress payment schedule
Progress Payments
All customers
You / Lender
Don’t forget! If you choose to finance through Loan Market Elevate, they will manage the process for you. Their team of construction finance specialists will work directly with your lender and our team. They will also connect you with the right lender while steering you away from those that are known to cause delays.
Call 13 63 93 | Clarendon.com.au
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