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How long should your construction loan take to be approved?

Discussing construction loans | Financial Information | Tiger Finance

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When you are applying for a construction loan, it is important to be aware of how long your loan should take. Waiting around for approval can be frustrating, as you are not able to progress with any type of construction until your lender gives you a decision.

You should be aware that there are quite a few stages that have to happen before you can be approved. While this may usually take up to two weeks, in some cases, it may be a long wait. While you are responsible for providing all of the necessary documents to your lender, sometimes your lender will need extra clarification or evidence of income or assets which may end up making the process last longer.

Read on below to find out everything you’ll need to know about how long approval for your construction loan should take.

How long should a construction loan take to get approved?

Generally, you should be prepared for the home construction loan mortgage process to take a few weeks longer than a standard mortgage approval might take. This is due to the plans and contracts that need to be properly reviewed before your loan can be approved.

Getting pre-approved first for a construction loan by your lender may help accelerate the process.  Even with pre-approval however, each loan is different. You should be aware that each build will have a different budget and timeline, resulting in different approval times. Your waiting time may also vary depending on your lender and their checklist of steps that they follow to approve a construction loan. When you apply, it may be possible for you to double-check with your lender how long they think you will wait for an answer, just to give you a clear guide.

What will you need to supply?

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Unlike the payment structure of a standard home loan, construction loans are progressively drawn-down. This means that you withdraw from the loan as needed to pay for the construction as it progresses.

In order to release the first lot of funds to your builder, you’ll need to provide documents of proof to the bank. These could include:

  • A signed building contract: This means that your finalised building contract should be signed and dated by both you and the builder.
  • Council-approved plans: Depending on your state and council area, stamped council approval may potentially take weeks to get.
  • Evidence of builders insurance: Typically, your builder will need to have certificates for both Public Liability Insurance and Home Building Compensation in order to be approved to work on your building site.

Once you have given these documents to your lender, they should be able to release the first stage of funds. Each lender is different though and may have a different set of documentation that they need in order to approve you. It’s best to speak with your lender to find out exactly what they will need to see, and when they will need to see it by so that you have a clear understanding.

Where does Tiger Finance come in?

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With Tiger Finance, we can help to get you a loan in four easy steps. You will have a free consultation with one of our specialists, and we will tailor-make you a loan. We will negotiate with lenders on your behalf before you are approved.

We have helped countless Australians with both good and bad credit ratings to be funded for their dream build. We understand that lending criteria from other lenders are too strict, and can stop you from achieving your goals. That is wrong, and it should not hold you back.

How we can help

Our finance specialists can help you find the right construction loan for your project. Construction finance is a complicated topic, and that is where Tiger Finance can help. We will find a loan that makes your dream project that much easier.

If you are one of the many Australians finding getting a construction loan difficult, Tiger Finance can make the process simple and pain-free. Call us today for a free initial consultation with one of our loan specialists to get started on your construction process.

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