Construction Finance and the Cost to Build Your Home

The Impact of Construction Finance on your building quote.

Today we want to talk about the seemingly intangible costs associated with your building estimate like Construction Finance expenses. These are items that don’t appear anywhere in the Building Contract documentation, but nevertheless have an important impact on the overall cost to build your home.

Bank charges and interest payments.

Construction finance costs are very easy to forget when assessing the overall cost to build your home. These fees will vary according to personal circumstances, but  include:

  • Valuation fees
  • Establishment Fees
  • Mortgage insurance costs
  • Costs for every inspection prior to a stage payment.
  • Interest Charges

An most important consideration as bit applies to the construction process itself, must be the interest payments, which are payable from the moment a loan is drawn on. This means that every delay adds to the overall costs.

It is vital that your builder be organised, and deliver your project on time. A quick calculation will allow you to work out what your holding costs are during the construction process.

The construction period can usually be broken down into its various stages

Construction Finance - Progress Payments by StageContruction Time Breakdown by Construction Finance Stage Payments Stage


*While this data can vary depending on circumstances, they are generally accurate on average.

Half the Building Time Consumes 85% of the Expenses.

What is important to note that by the time a builder is working on finishing the home, at least 85% of the costs would already have been incurred.

What that means is that for 45% of the building period, you are paying interest on 85% of your construction loan. That works out at about $150 per week for every $100K of borrowed funds.

More importantly, if you are borrowing money to buy the land as well, these costs multiply.

It is vital that your builder be ready to begin construction without delay, and proceeds with the construction without mishap.

Try adding the potential costs of delays onto your building estimate, and it quickly adds up.

Selecting the right builder is about more than just selecting the cheapest quoted price. A disorganized builder can add $1,000’s to the actual cost to build a home.

An efficient builder not only saves you money, but gives you peace-of-mind as well

We have you Covered

At AKS Homes we are acutely aware of this. That is why we invite you to test our service, test our prices; and most of all, test our record by talking to any of our customers – past or present.

We know how important this is, so we make sure that

  • Our systems revolve around smooth design and costing integration that facilitates a seamless on-site construction start.
  • Our real-time customer/builder online project management system ensures keeps the project on-track and eliminates misunderstanding and screw-ups. and
  • We provide you with a best possible price to start with, so you don’t get sucked in by Low ball quotes.