Building your Ideal Home!

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Building your own home is a very exciting and satisfying time, you get to personalise everything to your taste which means many decisions to make and it can get a little hectic!

 

Each Lender will differ in what is on offer for Building, and here are the key kinds of build loans you need to know about to see if building is right for you!

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Renovations to an existing property –Love where you live and just want to add value by another bedroom or upgrade of the kitchen or bathroom or outdoor area? Often a planned small renovation turns out to be bigger than you thought! You may need council consent, and you may need a Registered valuation depending on the size of the renovation - so call Stuart and to discuss your plan.

• New Build – Fixed Price Contract managed by a building company – it's best to get a pre-approval first to see if building fits your lifestyle - so call if you are not sure where to start… Stuart has contacts with building companies and alternative builders to save you time! 
   

  • Many building companies will have a fixed price contract, this means that you know what the cost will be from start to finish – there may be cost overruns and this is explained in the contract, so Banks will allow around 10% cost in your budget just in case. 
    
    It would be usual to get your solicitor to look over a fixed price contract to ensure it is suitable to what you want. 
    
    There are usually costs involved and one of these is a Registered valuation off the plans and land – this is to assess a fair market value for the lender – there may be up to 3 valuations required depending on the size of the build and the lender.
     

  • Generally a fixed price contract runs off progress payments – this means as each portion of the house is built, you draw a portion of loan to match. It can become expensive if you are renting however you generally pay interest only until the end of the build, once the build is complete we put a home loan structure in to suit.
     

• ​Turn Key Builds – You pay a deposit up front and balance of the loan on settlement, the builder pays all of the costs from purchasing the land to completing the build. If you have found the perfect section, some building companies will buy to enable you to complete a turn Key build with them. ​
   

  • ​This kind of build is suitable if:

    • You have a low deposit or if you will find it financially difficult to make progress payments and rent, or if

    • You want a simple hands-off build.
       

  • Often the cost is a little higher than the fixed price contract option as the builder/building company is paying all of the costs during the build until settlement.
     

    Costs associated, as with all build projects:
    • Registered Valuation of the land and
    • Plans to assess the fair market value on completion
       
• Self Managed Builds –Your builder obtains costs and quotes to complete the build.
  • This option would be appealing to:
    • A qualified builder looking to complete their own property or renovations, or
    • If you have access to materials at cost through the building industry.
       
  • There is a bit of work obtaining the costs and quotes as the build progresses however this option can work out less expensive as material is being sourced at cost. Most lenders will require a schedule up front and the invoices should match as the build progresses. 
    
    Costs associated, as with all build projects:
    • Registered Valuation off the land and
    • Plans to assess the fair market value on completion.
       
  • Lets have a chat and see if a self managed build is for you!
     

 

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