Want to save a whole heap of time and hassle? Let your mortgage broker handle all of this on your behalf! (Final progress payment only) Call the lender to discuss their additional requirements prior to sending them the request.(First progress payment only) A copy of the receipt from the builder showing that you’ve paid them the funds you’re required to contribute.A copy of the invoice from your builder.A signed progress payment request form (available from your lender) or a signed letter from you authorising payment.If you decide to go directly with your bank, you need to fax them the following: To request a progress payment, you can either speak with your mortgage broker or contact your bank directly. If you didn’t borrow 100% of the cost of construction, the lender will request that you pay all the funds you’re required to contribute before they release any payment to the builder. These documents may have been supplied during loan approval but the construction department may not have a copy of the file from the credit department that approved your loan. There are often delays with the first progress payment request because in many cases, the above documents haven’t been provided or have been lost by the lender. LEARN MORE The first progress payment request The construction department doesn’t always look through your loan file to find the documents so it’s faster just to give them the documents again. Have you already given these to the bank as part of your loan application? Give it to them again! We recommend that you send these to your bank at least 2 weeks before you intend to start construction in order to give them sufficient time to do their processing. You can either send these to the lender, prior to the first progress payment request or with the first progress payment request. Builders Indemnity / Public Risk Insurance ($5 million minimum for most lenders).Builders Insurance (certificate of currency).Construction certificate (NSW) or Building permit (VIC) or Decision notice (QLD).Please discuss how this will work with your mortgage broker.īefore the lender allows you to begin construction, you and your builder will need to provide them with the following documents: ![]() If you’re taking out an owner builder mortgage then the document requirements will be very different and the progress inspection policies of the banks will be more stringent. Progress payments are routine procedures, so it’s likely that things will run smoothly. We’ll get involved with our customers construction loans if there’s a delay with the bank or if there’s a problem that you need our help to resolve.Īpart for those situations, it’s best for you and your builder to deal directly with your lender’s construction department. The lender simply makes sure that these payments are made when stipulated. You and your builder may have already agreed to how many payments will be made, the gap between those payments, their amount and when they are due. Usually, a builder will require five payments to be made, one at each stage of construction. Calendar_today Last Updated: 6th May, 2022ĭrawdowns or construction progress payments is the process of asking your lender to pay your builder for part of the work that has been completed.
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