Change. It’s the only constant…

Whether you are upsizing or downsizing, an additional room that you need as your family grows or a different layout, structural alterations may be required. 

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Additions and major alterations are classed as structural improvements and are therefore generally not classified as renovations by the lenders. They usually include building of a structural nature such as adding a room, moving walls, putting in a swimming pool or adding a deck etc. These improvements have a real effect on the value of the property and are considered a major construction project. They must also have council approval.

The same process as for a construction loan is utilised and the additional work should add value to your home. The value of your property after completion of the additions should be sufficient to cover the increased loan amount. Even if you don’t borrow more money to complete the work, it is a condition of your loan contract that you must advise your lender of what you are doing.

When renovating an existing dwelling, building is generally completed in several stages. Rather than settle a loan for the entire cost of building the dwelling, the loan is drawn down in stages through progressive payments. This is called a ‘5 stage drawdown'.

Constructing additions to your home

The builder will issue you with approximately 5 invoices during the course of construction. As each claimed stage has been completed, you will authorise the lender to pay the builder. Prior to making a payment to the builder, most lenders will want to inspect the property to ensure the works claimed are completed.

• Slab (foundation)

• Frame

• Roof

• Lock-up

• Final inspection

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