What You Need to Know to Build Your Dream Home

January 21, 2016 - Posted in First Home Buyers, Money Saving

Quite aside from being a tremendously gratifying experience, building your own home is now one of the most economic options for potential first home owners looking to get a start in the property market. But the costs are often hard to assess for those with little experience in the building or construction industries, and many can be put off building a home simply due to the “unknown” cost factor. It makes sense then, that so many prospective homeowners are wary of mortgage brokers who dish out home loans and construction loans without providing full exposure of the potential risks of building a home. 

While some mortgage brokers provide little to no advice on budgeting and planning for a dream home, there are in fact many aspects of home building and budgeting you need to become familiar with before launching into development plans. 

Can I afford it?

Your mortgage brokers will help you calculate your expenses and find a construction loan to suit your budget. When you’re in the hands of trusted home loan specialists, the important question becomes “what can I afford within my budget”. No matter the size of your budget, the ration of expenses should remain fairly similar across the board. The following breakdown gives a rough guide to how you should be allocating expenses: 

Foundations: 10-15%. Includes excavation, slabs and plumbing. 

Frame: 15-20%. Covers the structuring of the building, including wall framing and possibly some brickwork. 

Lock up: 25-35%. Getting your property to lockup stage means installing things like walls, ceilings, doors, windows, insulation and locks that make the building a self-contained premises. 

Fixing: 20%. Cladding, skirting, tiling, benches/vanities installed. 

Final completion tasks: 10-15%. Your project manager should always carry out a walk-through with you to double check that everything has been installed as agreed. At this stage you can ask for any errors or oversights to be attended to. 

Be prepared for your budget to stretch, flip and fluctuate, but it’s always important to heed the budget as a guide to outgoing expenses. If you overspend on one thing, be ready to cut back on another. 

Will I need a home loan or construction loan?

If you’re building a home, it’s more than likely you will need to apply for a construction loan. There are hundreds of loans available in Australia and trying to find the most suitable loan for your build can be like searching for a needle in a haystack. The best way to compare construction loans and home loans in Brisbane, the Sunshine Coast and Gold Coast is to talk to a mortgage broker in your local area and discuss the potential costs involved. Have all of the information you’ve got about the dream home ready (even if it’s still in the dream phase) and they’ll help you compare home and construction loans from dozens of lenders, at no cost to you. 

Avoid the 10-year build by seeking a comparison of home and construction loans today. Multi-Choice Home Loans are trusted Brisbane experts in home and construction loans, dedicated to finding the right loan for your build. Contact us at Multi-Choice Home Loans to compare loans from dozens of lenders today.