Construction Progress Payments | Building loan down payments

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Construction Progress Payments: Information about construction loans

What is a construction progress payment?

A construction progress payment is a payment made by the bank or lender on completion of a building stage according to the agreed schedule. This is often called a construction loan draw down payment. The progress payment is made by your lender directly to your builder for the progress made on your construction and you get a draw down on your construction loan. Payment should only be made to the person or company whose name appears on the building contract and at the times nominated in your building contract.

How many progress payments will there be?

Typically builders request five progress payments. One at the completion of each major stage of construction.

Usually residential property construction projects are split into five stages and with a progression payment due at the end of each stage:

  • the slab
  • the frame
  • the outer brickwork
  • lock-up
  • workable completion

The fixed price contract agreed to by you and your builder will state how many payments, how much for each payment and when the payments are due. Your lender will make the payments according to the schedule in your building contract.

How long does it take for lenders to make the progress payments?

The lender will not pay the construction progress payment immediately on your request. It can take up to 10 working days to process the first and last progress payments and five working days to process other progress payments. It is a good idea to call your lender after you send progress payment request to ensure that they are aware of it and are acting the payment.

construction loan

How do I get a progress payment made?

What you need to know about construction loans

Information about the construction loans, the construction loan process, steps and costs. Find out about construction loans here:

Low doc construction loans

If you are self employed and have not yet completed your financial statements and tax returns a low doc construction loan may be an option. Find out what you need to know about lo doc construction loans, what documentation you need, loan to value ratios and other lender conditions.

Owner builder loans

Most lenders will not lend to owner builders. Owner builders are considered as higher risk of not completing the project on time and on budget so owner builders loans are more strict than standard construction loans where a licensed builder is used. Find out what you need to know about getting an owner builder construction loan.

Construction loan with bad credit

Do you have a few black marks on your credit file but are determined to build your dream home? Most lenders do not lend to people with credit problems for construction purposes. However, there are some flexible and understanding lenders that do! Find out what you need to know about getting a bad credit construction loan.

What can go wrong with construction loans and how to avoid it

Sometimes things can go wrong with your construction loan. These can often be avoided if you plan ahead. Find out what you should do to avoid problems with your constrcution loan.

Large project property development finance

Undertaking a larger development and need finance? Contact us about getting your large project financed.

How to get your property development finance approved

What you need to know about getting your property development finance approved.

Oak Laurel Finance Brokers – Development finance made easy!

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