Owner Builder Construction Loans and How They Work

Who is an Owner Builder?

An owner builder is the one who usually initiates or supervises activities like renovation or
construction on his land. He is the property owner and the general contractor of his land too.
He has a lot of responsibilities apart from supervising the activity on his land. He has manage
the budget and also hire subcontractors that shall further lead the project.
What is an Owner Builder Loan?

It is usually observed and thus, believed that owner builder loans are extremely difficult to get.
However, the task isn’t an impossible one. If you have equity or savings for your land, it
becomes easy to get some financial help from local lenders. You can also deal with also sign up
a deal with a guarantor and provide additional security to your property if he is willing to do so.
There is a long and tedious procedure along with some lending guidelines you need to know.

Let us talk about them.

How much can you ask for?

 About 95% of your total project expense: The response shall vary from case to case.
However, it is only applicable licensed owner builders who are carrying out a renovation
or construction activity on their own property.

 60% of your project expenditure: This is applicable for an individual who is NOT an
owner builder. In such a case, the loan is limited to 60% of the total value of your land
plus inclusive of other expenses that come under construction and renovation.

 100% loans:If you yourself are a guarantor, you can contact few lenders to get 100%
expenses for your land inclusive of the construction activity.

 Discounts: If your case is an exceptional one that satisfies the norms formulated by
some money lenders, then you can get professional services in competitive prices.
Moreover, your land can also qualify for negotiations and discounts.

A lot of firms provide you owner builder loans under the above mentioned criteria. The criteria
can be different for different firms.

How can you apply for an Owner Builder Loan?

Loan providing firms and mortgage brokers are expected to know the in and out of the process
of building new homes. They also keep a detailed knowledge about what banks can provide you
competitive interest rates and which all can approve your application of loan. You have to
organize the cost estimates you’ve set for getting yourself a loan. A bank can facilitate you with
mortgage brokers and help you do it. A proper bank can/has to provide you with a list of owner
builder lenders that can suit your choice. When you work with the best, the process becomes
less tedious and you have less trust issues.

Owner Builder helps save Time and Money in Building Homes in Australia

People often have this question – “Exactly how much do I save building my own house?” This is a rathercrucial question and can prove to be of much importance in the long run. If you are in a quandary aboutwhether you should build your own home or let anyone else to do the same, then first you should haverough idea of costs upfront. So here’s a breakdown showing how much one can actually save if he doesit all himself.

There is a fee that general contractors charge if someone is building his home, that is first majorsavinghe will have if he is building it all his own. Keep in mind that it is a management task in most cases. Mostof the general builder or contractors don’t do physical labour. Your tasks as a general contractorincludes budgeting, planning, bidding, hiring trades and suppliers, scheduling, quality checks, etc. alsowe know that builders charge more as the demand for their product increases.

The answer to the question, “How much can I save building my own house “, is referring to the actualsavings from doing the physical labour yourself. If you performed all of the labour to build the averagehome of today, you would save about 50% off the total cost. An owner builder is an individual or familythat takes charge of the renewing their home. In Australia, owner builders areoften referred to as self-builders and they take the control of designing and building for their residentialproject. The most difficult part of the job is hiring workmen for building and taking their responsibilities.This defines the character of an owner builder. If you are an owner builder then you have to act as ageneral contractor on the project, hiring individual sub-contractors to complete the work needed.

It is possible, though not necessary for owner builders to complete part of the work themselves. This isreferred to as “sweat equity “. If the owner builder has no experience in trade then he is oftendiscouraged. Owner building advocates claim that up to 40% of the total cost can be saved by buildingon your own.

Building one’s own home is quite demanding though, and requires time, patience, skill, etc. in order tofinance building your own home the bank may require a builder of records sign on the construction loandocuments. So if you can take care of this much, you can be sure of saving a great deal of money whilebuilding your own home.

Common advices before taking an Owner Builder loan

Being an owner builder demands your sense of responsibility and your strength to fulfil and manage your duties. But while you’re dutifully completing what has been asked, it is also wise to take precautions beforehand. It is wise to do so when it comes to getting an owner builder for yourself.

Some common advices and suggestions for you before you take up an owner builder loan are as follows:

  • Collect and preserve all waiver of liens:

You have to keep a track of all the expenses you come across while the process proceeds. You obviously cannot remember these expenses and so you should record them for yourself. Now, this recording has to be a two – way process because when it comes to finance, you need proof whenever a financial issue arises. The best way is to get the supplier sign a waiver of lien.

Also, when the construction terminates, the company assigned to close your permanent mortgage demands all the documents to check whether your construction has been fully paid.

If you do not have a proper record and miss some of them, the company shall ask you to find them and this in turn, shall delay the process of mortgage closure.


  • Theft of building materials:

Make arrangements to prevent the stealing of building materials. One, they are needed and it gets fussy to arrange some of them and two, they are expensive.

The bank might be of little or no help at all if theft takes place. If you still desire to continue your work then, you will have to use your own money to replace the materials. This invites loss and not profit.


  • Do not remit a deposit:

When you are an owner builder, you not only supervise the work going on, but also maintain record of it. So, it is your duty to get in writing about the work somebody will be doing for you, even before the work starts. If at all, problems arise after the work has been done, you know whom to contact and if necessary, take action.

You have to utilize the loan you’ve received in an efficient and convenient manner. You definitely wouldn’t want any amount of money to go in vain. Make sure you pay the supplier or the service provider after the work is done and you are satisfied. Paying just after the former might bring loss.

Beginners Guide for Owner Builders in Queensland

To achieve something in life, you need to go step by step. Keep the ego and pride aside even when you rock in the field. Start with a beginner’s guide or with the basics and then excel in it. Trust it, you will be nothing less than a pro. The same is the process of being an owner builder.

In order to be a successful owner builder, you need to have great, simply great communication skills. With such set of skills, you need to have good coordinating attributes and management qualities. To complete a particular project within or before the time limit, an owner builder should communicate effectively with his associates. This will enable fast and speedy and efficient completion of his project. The management skills and planning will cut off the unnecessary costing.

The most important aspect that makes an owner builder in QLD is his honesty towards carrying his responsibilities. If you cannot carry your responsibilities and duties responsibly, mate, you don’t have a long way to go.

Plan. Plan before every project of yours. Plan the cost. Plan the time you will need to complete your project. Before even commencing with the project, estimate the resources you have in hand. Know about your limitations and boundaries. Keep in mind. Do little but do your best. Don’t try to do the work which stands out of your limits. First, there are chances that you might mess up the work. And second, you will be compromising on the quality of your services. This is bad, in fact, evil for your career as an owner builder.

Planning will also help you to minimize your costing. Good news, you’ll terminate your project on a good note without having to bear the loss. When you plan things out with your associates, they will know when to do what. Thus, work will be delivered with efficiency and on time.

The courses that lie in the sphere of being a successful owner builder will train you with respect to all the basic requirements of being one. The add-ons you need are good communication skills, good leadership as well as coordinating skills, knowledge about the terminologies that are used and also completion of the required course.

The next comes the list of responsibilities an owner builder should carry:

  1. Look after the laborers. Check on them whether they are working in order or no. An owner builder should also take care of his laborers.
  2. After an efficient thought process, an owner builder should make a decision. And this should be rightly done because his decision will facilitate the work.
  3. An owner builder does instruct and supervise the work that needs to go on but he should also be present on the site. First of all, to supervise the work. Also, his role as a safety and health officer on site plays a key role.
  4. An owner builder administrates the work on site. He is the brain behind the construction work.


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