Land and construction lets you purchase land where you can build a property later. When buying the land & house,  we split the loan into ‘land loan’ and ‘construction loan’ so that the loans can be processed at different times. While applying for a land and construction loan  you are required to provide a copy of land & building contract, the building plans, tenders, and inclusions. In addition, council approved plan is also required before issuing commencement letter from the bank .

Land and Construction loans are suitable for borrower wanting a build a new home on a vacant block of land. A loan for a small scale development (such as building certain number of properties) can also be considered as the construction loan. However, building larger amount of properties will require commercial finance.  

When the construction loan is approved and the  construction of the property is initiated, the lending institution provides the payment at the completion of five stages; ‘slab down’ amount to help you lay the foundation, ‘frame stage’  amount to devise the framing of your property, ‘lockup’ amount to help you in the construction of walls, windows, and doors, ‘fixing’ amount to help you add interior fittings, and ‘completion’ amount to help in finishing touches such as plumbing, electricity, etc.  

The eligibility criteria for the construction home loans tends to be more strict compared to other home loan applications, and banks and other lending institutions prefer borrowers with a good credit history. Therefore, at Laxmi Home Loans, we work closely with our clients to revise their credit history, analyze their financial situation, and provide required assistance throughout the process of land and construction loan application and approval.