Firstly, a Construction Loan is a short term loan used to pay for the building of a house, normally a term of 12 months. As work progresses, money will be paid out in stages as its needed. Stages such as foundation being laid, framework going up and so on.


Unlike buying an existing house, this means that you’re only paying interest on the money that’s being paid out, instead of paying interest on the whole lot straight away. Allowing you to have more money to pay rent and other bills before you’re in your new home.


Banks all have different requirement for approving a construction loan, but we have compiled a list of the standard documents required and a breakdown of what they are.


House Plans

A building plan or house drawings designed by an architect will need to be formally approved by your local city council - they will advise you of this.


Fixed Price Building Contract

A building contract between you and your builder that you have both signed. Your builder will have listed the exact costs of building your home including a breakdown of stages and payment.


Building Consent Approval

Formal approval granted by your city council to build your home.


Resource Consent Approval

Formal approval of your house drawings granted by your city council.


Registered Valuation

A valuation of your house drawings by a registered valuer giving the likely value of your house once its completed.


Builder Risk Insurance

Certificate of Insurance given by an insurance company to your builder in the case that your house is damaged during construction due to natural or unnatural disaster, outlining that your bank/lender will receive money.


Rent Appraisal

Only applicable if you plan on renting out your home. The rent appraisal is required to be conducted by a real estate agency whom will give a projected outcome of what your home could/should rent for.

Here at first Step Home Loans we are here to help guide you through this process with our decades of experience in the construction and finance industries, we will make this as straightforward as possible.


Get in contact with us today to discuss your building dreams - let's make it a reality!