• Construction Option8

    • Construction Option Image
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      Looking to build or renovate?

      Ideal for: Builders

      For customers who intend to purchase land and build a new home, RAMS has developed a feature called 'RAMS Construction Option' which can be adopted on many RAMS full and low doc home loans.

      RAMS Construction Option allows you to pay your builder progress payments at each major stage of construction (slab, roof, lock-up and completion). Please note: A Progress Payment Administration Fee of $50 is payable per drawdown.

      Key Benefits of RAMS Construction Option

      • Maximum LVR for Full Doc is 95% 1 (or valuation if lower).
      • Funds progress payments to builders throughout the construction process.
      • Allows refinance of an existing loan from another loan provider to construct a home.
      • Can be used for major renovations to existing property.
      • Loan repayments are Interest only during construction which may provide potential cash flow benefits to you.
      • No set time for construction commencement after land settlement, this provides you with some flexibility.
      • 'At Completion' Valuation completed at no cost to you.

      Some Exclusions: Owner Builders, Developments, Builders "Spec" Homes (Display Homes) and refinance of partly completed construction loans.

      Important Information and conditions

      • An Authority to Commence Construction must be issued by RAMS before construction commences.
      • Construction must be completed within 12 months of an Authority to Commence Construction being issued by RAMS.
      • If you are not able to commence and complete construction within 12 months of when RAMS issues the Authority to Commence Construction, the loan will be subject to RAMS Land Policy.
      • Applicant’s own funds, if any, must be contributed prior to the first progress payment being made.
      • Documents required before the Authority to Commence Construction is issued include (among others): council approved plans, building specifications, fixed price building contract  with a licensed builder (signed and dated) and builders all risk insurance (or Builders Public liability insurance) and home owners warranty insurance (if applicable).
      • If a builder requires deposit funds to issue building plans, applicants must be able to cover deposit funds for plans from their own funds.
      • RAMS will not release any funds until each stage of the construction has been completed.
      • Final progress payment subject to “At Completion” Valuation, Certificate of Occupancy and certificate of currency of a comprehensive building insurance policy, satisfactory to RAMS.

      • Hypothetical scenario

        Julie and Tristan own some land just outside the city, by the river. After a few years, they decided to look into building a house on the land.

        Whilst looking at kit homes and talking to builders and architects, Julie and Tristan realised they needed to talk to their lender about finance before they could even think about deciding on the construction process. They calculated they would need around $150,000 to cover the design and building costs. The land cost them around the same amount and they knew the end product would be very attractive, particularly in light of the river-side location.

        The RAMS solution

        Julie and Tristan spoke to a few lenders and found RAMS were the most flexible. They could borrow up to 95% of the land’s value (tbc) which they felt would increase. The flexible progressive payment feature and interest-only repayments meant they could minimise their interest charges. Knowing how much they could borrow, Julie and Tristan started to confirm quotes and signed up their builder to manage the project. Now that finance was out of the way, Julie and Tristan were able to focus on the details such as colour schemes and accessories.
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    • Disclaimer:

      1.Lenders Mortgage Insurance Capitalisation can be included to a max of 97%. If LVR>80%, evidence of 5% genuine savings required. Ability to cover transaction costs and funds to complete purchase, if any, required. Subject to loan serviceability. 8. First Drawdown must occur within 6 months of settlement with the loan totally drawn down within 12 months.