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The Process of Incubating a Home

How long does it take?

Once you have saved for the stamp duty and a deposit, secured the land and a loan; the journey of creating a new home averages approximately nine months. Much like parenthood, building a home from scratch includes many of the trials and rewards associated with the journey.

Finding the one:

Like having a baby, finding a reliable partner to stand by your side, is an important factor. Your builder has three key roles to fulfill: complete the job on time, on budget, and without any major problems.

Questions to ask:

  • Who do your friends, family and connections recommend? Seek social proof.
  • Ask tradespeople, designers and architects for their opinions. Reputation is everything.
  • Get ‘Googling’ to confirm whether the builder you are considering, has stellar reviews. Star ratings count!
  • If there is nearby evidence of the builder’s previous work, make time to see it. The proof is in the building.
  • Cross reference your findings online with the Housing Industry and Master Builders Associations.

The whole package:

Depending on how personalised you want your new home to be, house-and-land packages are one (very popular) option. These packages are every bit as eligible for incentives like HomeBuilder and some very attractive pricing options are also available.

In with the new:

Perhaps you own the land and love the location, but want a new home positioned on the plot.  This means that you will be opting for a ‘knockdown and rebuild.’ Your home loan will be slightly different to a house-and-land package project or a land purchase with bespoke build.

Half committed:

What happens if you have secured the land, but not the house? If the land is registered, you will begin by making mortgage repayments against the land loan amount. As construction starts on your property, the bank will make progress payments to the builder. Concurrently, your mortgage repayments will increase each time a progress repayment is made. If the land is unregistered, you will need separate loans.

The trimesters:

  1. First trimester – Decision making:
  • Custom build or project home
  • Location, land and loan
  • Find a builder
  1. Second trimester – Committing:
  • Finalise the budget
  • Approve the schedule
  • Sign the contracts
  1. Third trimester – Creating:
  • Monitor the progress
  • Meet the milestones
  • Collect the keys

Getting help:

Remember the Baby Bonus from 15 years ago? Today, there exists a Building Bonus, of sorts. $25,000 is available for those building a new home. $10,000 – $20,000 is available in most states for first home buyers. In addition, $10,000 – $20,000 is available in building grants within Tasmania, NT and WA, plus thousands saved through stamp duty concessions, throughout most states. Did you know that $10,792 was the average stamp duty paid in Australia in 2020?

The labour:

When choosing a builder, use the below checklist before signing on the dotted line:

  • Seek licences – builder’s licence name and number
  • Confirm flexibility – are they willing to make changes?
  • Payment methods – amount upfront, set schedules, and more
  • Get proof – can you visit a recent build or two?
  • Oversight – who is the qualified supervisor?
  • Insured – is the builder covered for all liabilities?
  • Schedules – when will work start and end?
  • Total cost – how do the estimates work?
  • Progress – which milestones trigger payment?

The juggle is real:

The positives of building a home, from energy efficiency to personalisation, are sometimes offset by the arduous processes involved. These can occasionally prove many times greater than buying a ready-to-go house. Some say building a home can be compared to having a baby; once it is all over – you forget all about the ordeal.

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Finance Industries Australia Pty Ltd ABN 81 619 871 788 is authorised under LM Broker Services Pty Ltd Australian Credit Licence 517192. The information provided on this site is on the understanding that it is for illustrative and discussion purposes only. Whilst all care and attention is taken in its preparation any party seeking to rely on its content or otherwise should make their own enquiries and research to ensure its relevance to your specific personal and business requirements and circumstances. Terms, conditions, fees and charges may apply. Normal lending criteria apply. Rates subject to change. Approved applicants only.

*FIA was voted #1 Broker in SEQ by Loan Market in March 2021.