This document provides information about construction loans from Redlands Mortgages and working with Casey Jackson Homes to build a home. It outlines the key steps in the construction loan process including drawing up building plans and contracts, approving the loan, making progress payments aligned to milestones, applying for grants, allowing access to the building site, managing variations, completion inspection, and transitioning to principal and interest repayments after construction is finished.

1. Construction Home
Loan Fact Sheet
Mark Greggs is a credit representative (Credit Representative Number 479393) of BLSSA Pty Ltd (Australian Credit Licence No. 391237)

2. What is a Construction Loan
• A construction loan can be used to build your own home,
complete renovations or a knock down and rebuild.
• This Fact Sheet provides you with information about loans
for construction purposes
• It takes the right loan product structure, discipline and also a
key assumption that people borrow within their means and
don’t over extend themselves.

3. The Building Contract
• Firstly you will draw up plans, with the help of the expert advise from the
team at Casey Jackson Homes.
• A Building Contract will be drawn up which includes the cost and terms of
construction, and a Progress Payment Schedule for payments to be made
to your builder.
• Your Progress Payment Schedule will typically have a schedule of 5 – 6
progress payment milestones during the construction period. For example:
1) Deposit to builder – deposit to commence
2) Base/Slab – the foundation
3) Frame – the frame of your property
4) Lock up – external walls and roofing
5) Fixtures and Fittings – internal fittings and fixtures
6) Completion – conclusion of contracted items

4. Approving your Construction Loan
In addition to your loan application documents (evidence of your income, assets and liabilities,
etc), there are other specific documents you will need. These documents can be obtained from
Casey Jackson Homes and are required to complete necessary valuations:
• Signed and dated Building Contract
• Progress Payment Schedule (usually included in the Building Contract)
• Council approved plans for your construction
• Quotes for any additional work(s) to be funded by this loan, that are not included in the
• Building Contract
• Builders Insurance (Contract of Works), showing:
1. Insurance amount equal to or in excess of the Building Contract price
2. Name of the property owner
3. Name of the building company
4. Address of construction property within Australia or marked as ‘Anywhere in Australia’
5. Expiry date of the insurance policy
6. Public Liability Insurance, showing:
• $5 million minimum is the normal for a lender
• Expiry date of the policy
• Address of construction property within Australia or marked as ‘Anywhere in Australia’

5. • Start date of construction
• For most lenders Construction must commence within 6
months from the Disclosure Date on your Home Loan
Contract, and be completed within 24 months.
• Builders Deposit
• Casey Jackson Homes will ask for an up-front deposit to cover
the initial purchase of materials.
• The lender can provide funds from your loan to pay this as the
builder’s deposit is included as a milestone in the Progress
Payment Schedule.
Start Construction & Loan Deposit

6. Invoices from your Builder align to the Progress Payment Schedule
in the Building Contract.
• Simply sign each tax invoice from your builder to authorise
payment.
• The lender will pay each progress payment directly to the builder
for completed work. (This may be subject to a valuation)
1) Deposit to builder – deposit to commence
2) Base/Slab – the foundation
3) Frame – the frame of your property
4) Lock up – external walls and roofing
5) Fixtures and Fittings – internal fittings and fixtures
6) Completion – conclusion of contracted items
Making Progress Payments

7. First Home Owners Grant
(FHOG) Payment
• If you are eligible for a FHOG payment, complete the FHOG
application at the same time you apply for your construction loan.
• We’ll lodge the FHOG application to the Office of State Revenue once
we receive a ‘slab’ invoice Progress Payment request from you.
• Some lenders may be in a position to release your First Home Owners
Grant to you prior to completion of the building foundations to help
you pay for your builders deposit in unique circumstances.

8. Access &Variations
• Access to the building site
• The lender will request that you and Casey Jackson Homes must allow their
representatives access to the construction site at any time for matters
relating to your loan.
• All construction home loans require at least one valuation to be completed.
• Variations to your planned building
• If there are any variations to the Building Contract or council approved plans,
let us know immediately, as they may impact your loan arrangements.

9. Completion & Repayments
• Completion of your construction
• On completion of your construction, we will arrange for a final property inspection to confirm
all works to the property are finished as per contract and variations provided.
• Please allow at least 7 business days for the valuer to inspect the property and the final
payment to be made to your builder..
• Your Repayments during construction
• While your construction is in progress, your home loan repayments will be interest only on
the amount of funds you have drawn for your loan.
• Interest payments will be made on a specified day of each month and on the final funding
date, from your nominated account.
• During this time, most lenders welcome you to make additional repayments over and above
the interest only payments.
• Your first required monthly repayment amount will be due one month after the final Progress
Payment has been made.

10. Redlands Mortgages
&
Casey Jackson Homes
Local businesses working together to make your dream home become reality
Mark Greggs is a credit representative (Credit Representative Number 479393) of BLSSA Pty Ltd (Australian Credit Licence No. 391237)