Although owning a home of your own is a great feeling, there’s something to be said about having a property built from the ground up that’s yours and only yours.
In fact, if you’re a New South Wales resident, you just got an extra incentive to look at home loans for a newly-built home, thanks to the changes to the First Home Owners Grant (FHOG) in the state budget.
“The increase in the threshold of the $15,000 First Home Owners Grant on new properties to $750,000 from $650,000 in [the recent state] budget is welcomed,” Malcolm Gunning, president of the Real Estate Institute of New South Wales, said in a statement.
Whether you live in NSW and want to take advantage of the FHOG extension, or if you’re simply wanting to build a new home from scratch, consider these tips before you go hunting for a mortgage.
Pick the right plot of land
There are a number of factors to consider when choosing the block you want to build on. What’s the neighbourhood like? Does it satisfy your needs? For example, if you’re a parent, you’ll want amenities like schools and parks nearby, or if you want an affordable, swift commute, you might look at public transportation nearby.
Also think about whether the land you’ve chosen is conducive to the type of house design you’re after – not every block can accommodate a swimming pool.
Figure out the costs involved
Budget – it’s the magic word when it comes to any financial decision, and this is no different when building a new home. Use a home loan calculator or speak with a bank to work out what you can borrow before you commit to a building project. At the same time, don’t forget to let those additional, unpredictable costs measure into your budgeting. Building a house doesn’t happen overnight, and both paperwork and the elements can put construction off schedule during this time.
You’ll also want to factor in the administrative costs – you’ll likely need to purchase construction insurance at some point, there may be initial site preparation costs to take care of and you may even pay for a site inspection before you buy.
Always be vigilant
It’s liberating to have a brand new dwelling that no one else has set foot in, but one of the disadvantages is that you don’t know what exactly the finished product will be like until completion. To make sure your new dream home turns out how it’s supposed to, you’ll want to check in on the building site regularly. Don’t be afraid to have your own inspection of the site – if it’s dirty, messy or there’s even damage, these could be warning signs about the final product.
Choose the right builder
It’s vital that you pick the right person to build your home. Take the time to investigate the different candidates and look into their building history. Looking on the internet and speaking to previous clients can give you a good idea of their level of quality.