Construction Finance

We have Two Types of Products:

  1. COMMERCIAL  – Development/ Building Finance
  2. RESIDENTIAL – Home Renovation/ Building a New Home From Scratch.

COMMERCIAL

AAA Constructions

Construction/ Development Finance.

‘AAA’ Commercial Mortgages has helped to finance thousands of projects over the last 28 years.The ideal developer is someone who has experience developing over many years.

A good developer does not necessarily have to be a builder, but a good builder is a necessary for a medium to large construction project as the risk in a construction loan is in the build itself being completed to a high and accurate standard.

Equity is important. Good lenders prefer the developer to own the land outright or have a small debt. That way they can fund the total construction cost.

Feasibility is the first thing AAA looks at in judging the quality of a project.

The feasibility must include a 5% p.a.contingency fee of the total construction cost.

Interest is capitalised for the term of the loan-  Normally these are up to 18 months.

An indication of the cost to the applicant of the capitalised interest is as follows;

If the loan is say $5,000,000 and the interest rate is 7.00% pa,  in one full year the interest would be $350,000. The full year interest divided by 65% gives us an understanding/ guide of the payable interest amount. This is $227,500. Note this is because interest is only payable on the draw down amount.

Today pre-sales are very important.

Most of the major banks require at least 100% debt cover sometimes even 140% – why? This assures the bank that 40% of purchasers who buy of the plan will not be able to complete the purchase when the project is completed.

Private lenders – normally require around 25% debt cover.

The off-the-plan purchasers must be arms length from the builder/ developer.

At ‘AAA’ we can put together the strategies that can mitigate the negatives of a lender’s credit department.

Mezzanine and Equity finance is also available for the larger projects.

Remember:

“The road to success is always under construction”…

Product Information

Loan TypeInterest Only or Interest Capitalising for terms up to 24 months
Loan Amount$250,000- $100 million
Interest ratesVariable Rate (90 Day Bank Bill + Margin) – Call us for a quote!
SecurityEligible commercial & residential propert

 

Establishment FeesApplication, Valuation, QS and Legal fees may apply
Ongoing FeesProgressive drawing fee may apply

 

RESIDENTIAL

AAA Residential Construction

Renovating or Building a New Home from Scratch?

Our Rate 3.86%pa.

Most banks will charge you a higher rate during the construction period, whereas our bank charges the same amount for construction as it does for a normal home loan.

Product Information

Loan TypeInterest Only 1-5 years.
Loan Amount$150,000- $2.5 million
Interest ratesSAME AS YOUR HOME LOAN – 3.86% pa.

Click on The Get the Ball Rolling Link Below to make a time to chat to us about your specific construction needs.
CLICK HERE TO BOOK

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