First home buyers! Tips on building your new home
The idea of building your new home from the ground up is a wonderful experience. You have a say in the construction of the property, how big it is, how it’s finished and most importantly the layout of the property.
Here are the top tips when building your first home.
Understand the full budget
When building your home, a builder will never give you a fixed price contract without any room for variations. The most common variations are when the builder start digging, soil removal, rubbish removal and preparation of the land before the construction starts. There are allowances for these items, but the builder doesn’t know what they are working with until they start digging. If the expense exceeds the amount allocated in the contract price, you will be sent a bill for the difference. This is called a variation. Variations cannot be paid by the bank, you will need to pay for them from your pocket.
Repayments + rent during the build
If you are renting while waiting for the build to be completed, you will pay for your rent and have additional repayments on the loan at the same time. The loan repayments start as soon as the loan has settled. i.e., the land loan will be advanced fully, and the construction loan will be advanced progressively. Allow for 12 months to build, so you should have the capacity to repay the loan whilst paying your rent during this time.
Allow for extra expenses
When building a new home, usually you want to dress it with new furniture. If you are throwing every last cent to the new home, you won't have money to purchase new furniture to make the house into a home, you could always buy furniture as you save money but that's not fun.
