Owner Builder Loans

  1. Australia’s most experienced owner builder loan specialists.
  2. Finance review at no charge to ascertain suitability for our lenders.
  3. Assisting to meet the cash flow requirements of your build.
  4. Solutions for meeting budgets and timelines.

Why does Intellichoice do some much research for their owner builder construction loan?

At Intellichoice, we pride ourselves on doing a lot of research to help our clients to obtain owner builder construction loans.

We use RPData and Real Estate .com and well as many other industry tools.

The main reason we put so much effort into our research is that we need to be able to present to a bank just how much your property will be worth once the project is completed.

In the current economic climate, valuers are under pressure to not overvalue property and it is very easy for them to take a conservative approach.

This means that in many cases, instead of taking the time to research the local area and make sure the value is right, they just take an average figure based across a number of local sales. While sometimes this valuation may be fair, it doesn't take into account the individual qualities of the property.

So, part of our job at Intellichoice when we take on a client is to research exactly what is going on. What exactly will the property be like once it is completed? Are there many properties like that in the area? Is the area devalued because of a particular local issue that is not relevant to this property. Does the research indicate that the area is about to become a local hotspot?

A lot of the owner builders we take on as clients are experts in their particular area but don't want to be concerned with the issues associated with dealing with banks. That is exactly where we come in and because we have done it before (a lot) we are able to often get a positive result, even in a difficult market.owner build it themselves.

Written by Darin Hindmarsh

What's it really like to be an owner builder

Geoff shook his head glumly.

“That’s the third bank that knocked us back. Each time I speak with anyone, they are all really enthusiastic right up until I mention that we want to owner build. When I do, it’s like I just grew another head – they can’t get off the phone quick enough.”

Susa rubbed his back “Maybe it is time we thought about just bringing a builder in and building the house that way?”

“But I’ve always dreamed of building the home for my family to live in,” Geoff said. “It was one of the reasons I apprenticed as a carpenter.”

“Maybe it is time to try a specialist broker? There quite a few of them on the internet and it seems that some of them only do owner builder finance.”

Geoff sighed. “I guess. Let’s make some calls on Monday and see what we can find out.”

Quick Facts on Owner builder finance.

Owner builder projects are much less common in Australia than standard construction home loans.

It is not an area that banks traditionally like to operate in and it pays to have someone on your side who knows which financial institutions are currently offering owner builder finance and knows range of packages on offer.

Specialists in owner builder finance also understand the importance of research and will often use tools such as RP Data and Real Estate.com to give the project the best possible chance to go ahead.

For many owner builders, for example, it is difficult to get an accurate valuation because banks traditionally add the cost of the land with the proposed cost of construction. But if you are planning on saving $100,00 on construction costs, that saving can actually work against you in a valuation.

In the current economic climate, valuers are under pressure to not overvalue property and it is very easy for them to take a conservative approach to your project.

Specialists in Owner Builder loans use the research available to them to research the local area and, if necessary challenge the final valuation based on the factors such as the individual qualities of the property. The types of questions a specialist will ask are: what exactly will the property be like once it is completed? Are there many properties like that in the area? Does the research indicate that the area is about to become a local hotspot?

Written by Darin Hindmarsh

How Intellichoice can help you get an Owner Builder Loan

The answer to that question is best answered by Intellichoice CEO, Darin Hindmarsh. “Our greatest strength for clients seeking an owner builder loan," he says "is our experience. We have more experience than anyone else in the market and because of that, we can get our clients through from their initial queries to completion.

He also adds, "the other advantage we offer to our clients is that because we have done it so often, we know very quickly whether the loan will go ahead.”

“We had a client recently who provides a perfect example of how much we can assist our clients. The wife was in IT and her partner was a tradesman. We assisted them to get finance to complete a job that had started and gone over budget due to a change of council bylaws specifically relating to fire laws.

We were able refinance them from their current bank and continue to fund the project (and remove some enormous stress from them.)

During stage 2, the partner decided to save money by doing more of the construction himself. The plan was that he would do it faster and cheaper. This didn’t happen and because he hadn’t been working they ran out of money. At the same time, she changed jobs to a slightly lesser income. Also the market value had dropped in their area dramatically.

Again the bank wouldn’t advance any more money and we had to use our expertise to come up with a solution.

Because we were aware that this sort of thing could happen, we had already developed relationships at a higher level with the banks and they finally agreed to assist the clients in completing.

The bank eventually funded it to completion and we had very happy client singing our praises.

They just kept saying “We couldn’t have done it without you.”

Written by Darin Hindmarsh

What are the requirements for an Owner Builder Loan?

Building a new home can be like a dream come true for many people but it is very costly and you may not be able to cover all the expenses without giving up on most of your savings.

No matter at what stage of construction you are, you can get hold of owner builder loan to help cover your expenses easily. For obtaining owner builder finance in Australia, you have to meet certain requirements. These requirements may vary from bank to bank and may get strict if you have some issues in your credit rating and score.

The general terms for owner builder loans include:

  • You need to provide collateral against the loan you are applying for. This collateral can be in the form of some property or a strong bank statement.
  • Some banks require you to show a stable income or an employment certificate to ensure that you will be generating enough income to repay the loan amount.
  • The terms and conditions of the loan need to be discussed beforehand with your agent so that you do not have to return anything in excess of what you have gotten as a long.
  • You may also be required to bring in guarantee of two or more people to show the bank that you can be trusted with the amount that you are asking for a loan.

Written by Darin Hindmarsh

What kind of information will you need to provide to get an owner builder loan?

If you’re an owner builder looking for owner builder finance you will be required to provide quite a lot of information before your case will be assessed.

The first thing you'll need will be a "schedule of progress payments." This will show how much money you will need as you build and when.

To be really confident, it should also detail the works you intend completing at each stage - and it is wise to add as much detail as possible. The more information you provided the easier it will be for a valuer to assess the situation.

You will also need a list of all materials you will require and credit terms etc for each of these items.

Of course you will also have to provide evidince that you have your own savings for the project.

You will also need to provide information about your risk insurance as well as Council approved plans.

If you intend to carry out any work yourself or any family member or friends are going to work for you, details of this also need to be included. Inforamation about the work of any qualified tradesmen will also be needed.

Written by Darin Hindmarsh