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Low doc construction home loans have quite specific requirements when it comes to the construction phase of the process although the profile of the product is not too dissimilar to a traditional low doc home loan.
Below we take a look at some of the basics of the construction low doc home loan product profile and we invite you to browse through.
Minimum and Maximum Loan Amounts
The maximum home loan amount for construction low doc home loans is in the region of 1 million dollars. It is not too common for a construction low doc to be of this value although the option is there for higher lend home loans.
Maximum lending amount are governed by key factors such as location and the type of construction sought after.
Minimum home loan amounts are not often an issue as they sit around the 50 thousand dollar mark.
Location Guide
When it comes to the location of the property all low doc home loan providers are postcode driven. What this means is that there are preferred postcodes that they lend into and others which may lower the LVR they are willing to provide.
Generally there are categories ranging from 1 through to 6 with 1 bring the preferred postcode, these categories are determined by the population and housing density in the postcode.
As an example, if you were to purchase in a category 6 postcode which is classified as rural then the LVR may end up being 70% rather than 80%.
Bear in mind that each low doc home loan provider has their own parameters when it comes to location guides so please ask us for more information.
Investment Guide
As mentioned, investors are able to use a low doc construction home loan to expand their investment portfolio and with many choices available there is a great deal of flexibility in the choice they have.
There are low doc construction home loans which allow up to 82% LVR and this helps minimise the funding gap which frees up these funds for other expenses or projects for that matter.
Even though the home loan is a construction low doc the lenders do allow the rental income to be used for serviceability purposes.
Interest Rate Loading During Construction
With the majority of low doc construction home loans there is generally a loading on the home loan interest rate.
This applies during the construction phase and is in place to cater for progress valuations as they occur throughout construction, generally there are up to 5 progress valuations.
The interest rate loading is approximately 0.50% on top of the standard variable rate and reverts to this rate once the construction is complete.
There are a number of product profiles across the low doc construction home loans we have on offer so we invite you to contact us and find out more about which home loan option may suit your needs best.
Alternatively you can contact us and arrange an appointment with a low doc home loan consultant.
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