Hatch Financial Services

Explore Your Home Renovation and Construction Loan Options

Embarking on the journey to build or renovate a home is both thrilling and overwhelming – especially if it’s your first time.

We recognise the unique challenges that come with this process (both because we have renovated our own homes and because we have helped hundreds of clients to build/renovate homes).

Whether upgrading your current home or constructing a new one, we help you get diverse loan options designed to align with your vision and financial objectives.

Get in touch to discuss your options.

Call Us (1300 442 824)

Understanding Your Loan Options

The journey starts with helping you to understand your borrowing capacity and the options available to you to fund your building project.

From there we move onto applying for finance and the construction process itself.

Getting construction loans (which cover new builds and renovations) approved and administered is typically far more involved than normal lending.

Our experienced mortgage brokers will help you set out a road map to success, get the loan approved and deal with the bank the entire way through the construction process.

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Finding the Right Loan for Your Project

Whether you’re envisioning a brand-new home or planning extensive renovations, securing the right home loan is paramount.

Hatch Financial Services is committed to finding the right home loan solution for your situation. Our experienced mortgage brokers navigate the intricacies of the finance landscape to ensure you not only secure a loan but also benefit from the most favorable terms.

Our mission is to make the entire process as smooth and stress-free as possible.

Take the first step towards your dream home today.

Get in touch with Hatch Financial Services, and let’s turn your vision into a reality.

Call Us (1300 442 824)

Loan Options for Your Needs

Finding the right home loan is crucial when renovating or constructing. We collaborate with over 25 lenders, providing a diverse range of options tailored to your specific needs.

Our independent mortgage brokers will help you compare interest rates, loan features, and repayment structures to find the perfect loan for your situation.

Some of the methods of funding renovations and construction, include:

Cash Out/ Equity Release

Cash Out/ Equity Release:

For projects that do not involve structural works a borrower may be able to borrow against the value of their home to access funds. In effect the lender gives the borrower the money upfront and the borrower controls how it is used.

This is suited to projects where the borrower has equity in their home and is using the funds for things such as:

minor renovations (painting, redoing flooring, curtains/finishing’s)
kitchen or bathroom makeovers,
landscaping,
putting in a pool.

Construction Loans

Construction Loans:

The most common construction loan involves a Fixed Price Contract with payments tied to the completion of a limited number of physical stages (for example; deposit, slab, frame, roof, internal fixings, completion).

Alternative Construction Loans

Alternative Construction Loans:

Some builders require payment each month based on the percentage of the work completed.

Very few lenders will fund construction on this basis.

The lenders that will do it will only do so for construction works costing over $1-1.5m and the lenders will require additional conditions such as Quantity Surveyor Reports to go along with each monthly payment request and the borrower having a contingency fund (equal to 5% of the building contract) that the bank holds until the works are complete.

Owner Builder Loans

Owner Builder Loans:

Only a few brave borrowers go down this path and mostly they are builders themselves. To be an owner builder you need to have very strong equity in the property and lending to property ratios need to be low for a lender to consider. Only a few lenders will consider lending for owner-builders.

Start Your Journey with Us

Hatch Financial Services is here to ensure your financing journey is as clear and straightforward as possible.

FAQs

Can I use a home renovation loan for any type of home improvement?

For small renovations where you have sufficient equity (that is the existing debt is small enough in relation to the value of the home and the amount of money sought) you may be able to use a standard home loan to finance your renovation (this applies to non structural renovations typically). For all other situations, structural renovations, new builds or where you don’t have sufficient equity in the property, you will need a construction loan

Can I get a construction loan if I am going to build my own home?

Only a few lenders will finance owner-builders where structural works are involved. It is extremely hard to go down this path and it does require the borrower to have strong equity in their property to go down this path. If you are a registered builder this certainly helps but it is not a complete solution.

What are the interest rates for home construction and renovation loans?

Interest rates vary based on factors like your credit score, loan amount, and the overall lending environment. Rates for construction loans might be higher during the construction phase due to their unique nature.

Do I need a down payment for a home construction or renovation loan?

The builder will need a deposit but the lender will not necessarily need you to contribute a down payment yourself. It will depend on you borrowing power and the size of the loan relative to the property value.

How long does it take to get approved for these types of loans?

Approval times can vary depending on the lender and the complexity of your project. It’s generally longer for construction loans due to their detailed nature, the need for more documents in support of the application and the need to get a valuation of the property based on the project being competed.

Can I choose my own builder for a renovation or construction project?

Yes, in most cases, provided they are qualified/ registered builders and have the right licences and insurance.

How do I determine how much I can borrow?

Lenders will consider factors like your credit history, income, and the value of your property to determine how much you can borrow. Hatch will help you to work this out.

What happens if my construction or renovation project goes over budget?

It’s important to have a contingency plan &/or some surplus savings up your sleeve as it is hard to extra funds mid project. The risk of cost blow outs is why in many situations you will need a fixed price building contract covering the construction works. You may have more flexibility depending on factors like your income, the amount of equity or saving you have and of course lender policies.

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