What are progress payments?
Progress payments are instalments made at regular intervals for the build component of your new home, not the land. They may sound complicated, but they’re not.
When you build your home with Eden Brae, you’ll make progress payments at significant milestones in the building journey. These instalments are outlined in your fixed price contract as a percentage of your total build cost, in line with Australian standards Building Contract. Payments at regular intervals reduce any potential financial stress for both you and the builder.
How will progress payments affect my build?
After you have paid your preliminary fee (non-refundable) and agreed to your Tender Presentation and acceptance fee, there will be one final exciting payment of 5% once your contract is signed which then gives you the green light before your construction progress payments need to commence.
Typically, you’ll make progress payments after these major milestones once your construction has commenced such as:
Progress payments are for the build component only. They include any items which form part of your contract. If your colour selections are included in your contract, they’ll take the form of a post-contract variation and automatically become part of your progress payments.
So, when you head to the colour studio to select your finishes and fittings, remember to stay within your approved budget. Otherwise, you’ll have to fund the out-of-pocket cost yourself or ask your lender for additional funds.
The land and the build are two separate components
If you’ve invested in a House and Land package with Eden Brae Homes, the cost of the build and the cost of the land purchase are two separate components. You’ll need to pay the developer (and if you choose to build with Eden Brae, in this case they are the developer) an initial deposit to secure the land and the remaining amount in full once you’ve settled on it.
Whether your build and land loans are combined or separate depends on your agreement with your lender. It’s essential to provide your lender with supporting documentation that clearly outlines the separate costs of the land and the build.
Progress payments may seem complex, but don’t worry; they are a straightforward, organised process usually arranged between the finance lender and the builder. To you, it will feel seamless.
If you’ve got any questions regarding starting your new home build, feel free to give us a call 1300 645 860.