When you’re buying land and building a house there are a few more steps involved than there is in a standard loan for an established house. That’s why a GHA Loan makes sense.
We understand the land purchase, construction loan and green building process inside out, and can help you every step of the way.
We’ve been doing it for over 15 years and have hundreds of happy clients.
We take the stress out of the home loan part of the equation and give you the peace of mind to enjoy the building process.
Part One: Getting Started
The documents you will need to get the loan application started are:
- the front page of the Contract for the Land;
- an itemised and signed Tender from your Green Homes Australia builder on their letterhead which will detail the inclusions and the total price;
- the plans for your home.
However it may be that you only have an idea of your budget at this stage. If that is the case then we can prepare a ‘pre-approval’ for you.
We will then talk with you about other documents you will need relating to your income, assets and finances. To help assess your income and assets we need information from you such as:
- payslips or income statements for each person applying for the loan for the last 3 income periods to help us to work out how much you can possibly borrow;
- a copy of the last 3 statements from each lender account each applicant operates to understand your savings history;
- details about existing homes, investment properties, cars, boats and other substantial items (if any);
- income from trusts or other sources.
We will also need information about any financial responsibilities that you have. This can include things like the:
- details about dependent children or adults in your household;
- details of any personal loans, car loans and similar credit contracts;
- last 3 credit card statements for all your credit card, hire purchase, layby and similar credit agreements for the same reasons as above.
This helps us to understand what financial commitments you may have that we will need to take into account in understanding how much you can afford to borrow and repay.
Once we have your initial inquiry, we will let you know exactly what documents and information you will need to provide in order to begin the process of preparing the application.
Part 2: Approval
Once GHA Loans is happy we have everything you need for your application, we will evaluate your circumstances and look for the best loan to meet your circumstances needs.
We have access to over 20 lenders and lending institutions to compare rates, and their loan criteria.
In selecting the best loan option for your circumstances, we have to take into account both the lending criteria and the loan rate.
For example, one lender may have a lower rate than another lender, but may not lend to clients in your circumstances. In some cases, a lending institution may offer a special rate if you bring all your financial products to their institution. Each lending institution applies different lending criteria and incentives which are often very complex to navigate and compare.
We understand the lending criteria and incentives for each of institutions we deal with, and will try to find the best products that suit your circumstances and needs.
Part 3: Obtaining Your Consent to a Lender
We will provide you with a recommended lender for you to consider, including information about their current rates and criteria. We will answer any questions you have about our recommendation. Once you have chosen your preferred lender, we will then proceed to prepare your application.
This is one of the things that most people hate about applying for a loan, but GHA Loans does this every day so we can prepare the application form using the information you supply us and all you need to do it review the document and sign it – it’s that easy!
Part 4: Unconditional Approval
Once your chosen lender has received all the documentation they require they will assess your application. During the assessment process, lenders often need to ask further questions to clarify your application. GHA Loans tries to make this easy. We will talk to the lender to answer questions or clarify information from the information you have provided. Every now and then we may need to come back to you if we cannot answer a question from the information you have provided.
Once the lender is satisfied it has all the information it needs, and has answers to all its questions, they will issue what is called an “unconditional approval”. An “unconditional approval” means that the lender has approved your loan based on the information you have supplied to us.
In some cases, a lender may issue a “conditional approval” which means that they may require some additional information before they can proceed to approve. It may be that the approval is just subject to a satisfactory valuation. Generally, once they have received the information specific in the conditional approval and they are satisfied, they will issue an “unconditional approval”.
Part 5: Issue of Loan Documents
The lender will now issue the formal loan documents for you to sign and send back.
Part 6: Obtain Development Application Approval from the Local Council or Planning Authority
Once you have an “unconditional approval” from the lender, your Green Homes Australia builder can proceed to submit a Development Application (DA) to the local council or planning authority.
The amount of time it takes to get a DA consent will depend on the local government area, the specific area you are building and other factors. Your Green Homes Australia builder will help you through every step of this process.
Part 7: Commencing Building
Once the Local Council or Planning Authority has issued a DA approval for your Plans, Green Homes Australia will send this to GHA Loans. We will let you know when we get the DA approval.
We will then send the DA Approval and Green Homes Australia insurance certificates through to the lender with a request for the lender to issue a ‘commencement letter’ to the builder. You will get a copy of this letter as well. The commencement letter means that you and Green Homes Australia can start building.
Part 8: Laying the Slab
The first stage of building is laying the slab.
Once the slab is laid, GHA Loans will need to get an official Valuer out to inspect the slab. This is to ensure that the slab is the same as the plans. At this stage, many states will release the First Home Owner grant (if that is applicable to you.)
Once this inspection is done and the Valuer certifies that the slab conforms to the plan, GHA Loans will send the valuation to the lender and the lender will release the first progress payment. Interest will now start accruing on the loan.
Part 9: Progress Stages
At each stage specified in the Contract with the Green Homes Australia, the builder will issue an invoice to you. Once you receive the invoice, you send this to GHA Loans and we will liaise with the lender to release the funds for the next stage of the construction. This is called ‘progress payments’. The stages are generally:
- External finishes
Part 10: Completion
Once the construction is completed, Green Homes Australia will issue you with their final invoice and the Occupation Certificate. You must obtain Building Insurance for your home as well.
You then send the final invoice, Occupation Certificate and your Building Insurance Certificate to GHA Loans. We will provide these to the lender who will arrange a final inspection by a Valuer.
The Valuer will check to make sure the work conforms to the original plans. Once the Valuer is satisfied, she or he will notify the lender and the lender will approve the final invoice and issue the final payment from the loan.
At this stage, the builder will give you your keys and you can move into your new, green, healthy home.
Part 11: Loan Management
Once you have received final payment, GHA Loans will contact you to discuss how you would like to manage your loan going forward and your options. At any time after moving into your home, you can contact GHA Loans to discuss the loan and your future finance needs including personal loans for green products, car loans or other financial needs.