Map the budget to the work
Separate the land, design, consent, construction and finishing costs. Include somewhere to live during the work and a contingency for delays or variations. A quote for the build and a budget for the whole project can be very different figures.
Understand progress payments
For a construction loan, the lender may release money in stages. Confirm what invoices, valuations or completion evidence it expects before each drawdown. Ask how interest and repayments will work while the project is underway and after the final drawdown.
Prepare the project file
- Plans and scope of work, a proposed building contract and a cost breakdown.
- The builder’s payment schedule, including the initial deposit and final payment.
- Consent and insurance information where required.
- A record of your equity, savings and other funding for variations.
For a smaller renovation, an adviser can compare a top-up on the existing mortgage with other lending structures. The lender will assess the purpose, security and affordability.