Thinking of building - tips to understand the steps

Thinking of building - tips to understand the steps

Making the decision to build a new home is an exciting time. But like most major projects, it can also come with its own unique challenges, which can be stressful if not handled correctly.

These building tips will help you streamline your build.

1. Get finance as soon as possible

We’ve put this at the top of the list for a very good reason. Without knowing your budget, it’s impossible to make informed decisions regarding the scope of your build.

Before you even look at a block of a land, speak with a mortgage broker about what you can afford. That way you can easily rule out house and land packages or custom builds beyond your budget.

It is very important that the land and build you purchase is within your repayment capacity. This will greatly reduce your financial stress, and make the building process far smoother.

2. Make sure you have the right loan

Many loans for house and land packages are bundled into one single home loan, which is then released in 2 phases – one for purchasing the land and the second for when the build commences.

It’s important to know what kind of loan you’ve secured, so you know when funds are being released and what to repay. A good mortgage broker will recommend a loan that works for you and your circumstances.

Contact us for more information on finding a building loan that saves you more.

3. Find the right builder

Finding the right builder will make a huge difference to the success of your build. Now that you know your budget, short list builders within your price range and then run a series of background checks on each of them.

  • Check their Facebook page and Google+ pages for reviews from past customers.
  • Run a Google check on the company to see what comes up.
  • Ask the builder for references from past clients.
  • Find out how long the builder has been in business.
  • Meet with the builder to get a feel for them.
  • Look at past examples of their work.

Head here for a comprehensive builder checklist from Consumer Affairs Victoria.

4. Choose your land wisely

The block of land you choose will have a big impact on your future return on investment. Once you know your budget, consider the following factors when working out where to build your new home.

  • Stay close to community hubs – is the block close to schools, public transport and shopping centres? This will improve resale value, if you do decide to sell later.
  • Location – look at areas with strong capital growth over the past few years. Check for key growth data.
  • Views – elevated blocks or land with views of parks, the ocean or other natural scenery are not only pleasing, but also add value to your investment.
  • Developments – if the area is a new estate, look at the full vision for the development. If not, check to see if any new developments are in the pipeline, which may add value to the area.

5. Secure insurance

No matter how well you plan a build, there may still be unforeseen hurdles that crop up along the way. This is especially true if you are an owner-builder.

If you are using a builder, you may have building insurance included in the contract you signed. This will depend on the total amount of your build and the laws regarding building insurance in your state.

Ultimately, we recommend double checking whether you need to take out building insurance to cover yourself for any loss or damage during the build, as well as other factors.

Get started

If you’re looking to build a home, contact one of our mortgage brokers about securing a competitive building loan. We compare hundreds of different loan products, then recommend options that match your budget and circumstances.

Financial and legal advice disclaimer: This information is general in nature. Mortgage brokers do not provide financial or legal advice. Clients seeking financial or legal advice will be referred to a qualified financial planner or legal professional.