The questions and original answers

In New Zealand, the key thing to confirm before signing your new-build contract is whether your construction finance can be fully approved on terms that will actually let you proceed with the build.

Conditional approval is not the same as unconditional approval. Your lender may still need to verify the final building contract, fixed-price quote, consent documents, valuation, your contribution or deposit, and other lending conditions before releasing funds.

The risk is that you sign a binding building contract, become committed to the builder, and then discover your lender will not fund the project as agreed — or will only lend less than you expected.

Here’s what I would have confirmed first.

Your pre-signing checklist

Before you sign

0 of 6 checked

1. Full finance approval requirementsAsk your bank or mortgage adviser to list every outstanding condition in writing, and confirm whether it will approve the loan for this specific build. Find out whether the signed contract is itself required before final approval.

2. The exact building contract and priceHave the lender check the actual contract, plans, specifications and payment schedule. Confirm the price includes GST and clarify exclusions, provisional sums, site works, service connections and potential variations.

3. Your total budget and cash contributionConfirm the approved loan amount covers the required progress payments, and calculate how much cash you must contribute, including the deposit, legal fees, insurance, council costs and any items outside the contract.

4. Valuation, consents and insuranceAsk which documents remain outstanding. Depending on the lender, these may include an acceptable valuation or on-completion valuation, building consent, resource consent if applicable, and contract works insurance.

5. How the construction loan will be paidGet written confirmation of the progress-payment process, drawdown conditions and timing. Make sure the lender can release funds when the builder's invoices fall due, rather than assuming approval means the money is immediately available.

6. What happens if finance is declined or delayedAsk your solicitor to review the contract's deposit, commencement, cancellation, default and delay provisions. If you need finance protection, discuss whether an appropriate finance condition or other contractual protection can be negotiated before signing.

These checks reflect the kinds of conditions lenders may require before full approval and the first drawdown. See ANZ's construction finance guidance and BNZ's guide to building a house.

What to ask your bank or mortgage adviser

I would send this question before committing:

Email

Subject
: Confirmation of construction finance before signing builder contract

Hi,

Our builder is ready for us to sign the building contract, but our construction finance is currently only conditionally approved.

Before we sign, could you please confirm in writing:

• All outstanding conditions for full loan approval.
• Whether the proposed building contract, plans, specifications and total price meet your lending requirements.
• The final loan amount and the cash contribution required from us.
• Any outstanding valuation, consent, insurance or other documentation requirements.
• How progress payments will be funded and when the first drawdown can occur.
• Whether there are any remaining matters that could prevent the loan from being fully approved.

We want to make sure we can meet our contractual obligations to the builder before committing to the build.

Please let us know whether we should wait for full approval or whether you recommend any specific contractual protections before signing.

Kind regards

One important distinction

You do not necessarily have to wait for unconditional approval before signing in every case. Some New Zealand lenders require a signed building contract as part of their final approval process. The important thing is to understand the sequence your lender requires and avoid accepting obligations you cannot meet if finance does not proceed. Planning your building or renovation projectConstruction loans - Buying land and building a house

For residential building work costing $30,000 or more (including GST), the builder must generally provide a written contract, a disclosure statement and the consumer protection checklist before signing. Your solicitor should review the contract and advise on your particular risks. See the MBIE homeowner guidance. Before building work startsHomeowner rights and obligations

My recommendation: Before signing, get your mortgage adviser to confirm the outstanding finance conditions and have your solicitor review the contract, particularly what happens if finance is not finalised. If the builder is pressuring you to sign now, ask for time to complete those checks.

One detail would help me tailor this to your situation: is your build a house-and-land package with a developer, or are you buying the section separately and contracting directly with a builder? The finance and contract risks can differ quite a bit.