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  • 5 steps to building your first home

    5 steps to building your first home

    You might decide that rather than buying an established property as your first home, it would better suit you to build. 

    Building allows you to customise your home from the outset, creating a brand new property that suits your needs and lifestyle without having to renovate. However, building is a big project that requires understanding, planning and careful management.

    Here are 5 steps to help you understand some of what is involved when planning a new build.

    1.  Ensure you have pre-approval first.

    Construction finance can be complex and the amount of deposit required will vary depending on the lender you approach.  Talking to a lender that specialises in construction loans may be a good starting point.

    2.  Do you qualify for a government grant?

    Eligibility of a first home owner’s grant may mean you require less deposit to build your first home. Make sure you check the rules in your State or Territory to understand if there is a grant available to you and whether you qualify.

    3.  Finding the right block of land.

    Sometimes it is beneficial to buy a house and land package as opposed to a private block. However, you may prefer to finance your dream block first, and then take your time in choosing the right home and builder. It is a good idea to speak with your lender to understand how your loan will be structured and what will work best for your personal circumstances.

    When choosing a block of land it is important to consider: 

    Does the block come with a soil report? The type of soil you will be building on can impact footing costs.  - Is the block flat? Land with slope can mean expensive footings or retaining costs so do your research.

    4.  Selecting the builder.

    Make sure you do your homework when selecting a builder. Ask questions around whether they provide a fixed price build contract. If they don’t, ask what items are not fixed and what costs are likely to change. Make sure you understand what is and what is not included in the price.

    Other questions you may want to ask prospective builders are: 

    • How much should I allow to finish the build? 
    • What is the quality of the fixtures and fittings included?
    • How easy is it to vary selections? 

    There are many areas where you can go over on your budget so talking to a lender that specialises in construction can help guide you through the process.

    5.  Building your dream home.

    Most construction loans work on a progressive payment process. Payments are made to your builder from the loan account at each major stage of construction.  You usually make interest only repayments on the loan balance during construction. It is a good idea to ensure you have some cash in reserve to assist you as you get towards the end of the build especially if you are paying rent. It may be that it is worth considering moving in with the parents while you build!

    Speak to Stephen Villios about your home loan needs.

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    About the author

    • Unley - Stephen Villios

      Home loan expert, Stephen Villios is the Principal of RAMS Adelaide Central.  His business has won many awards and his team of lenders have many years of experience in home loan lending.

      Steve and his team are passionate about helping customers achieve the dream of home ownership and specialise in loans for first home buyers, investors and construction lending. 

      Contact your local RAMS Home Loan Centre about your home loan options.



      Stephen Villios

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  • Disclaimer:

    The information here is of a general nature only and is not intended to constitute financial or tax advice. You should consult your professional adviser, accountant or taxation expert for advice specific to your personal circumstances.

    The views and opinions expressed in this article are those of the author alone and do not necessarily represent the views or opinions of RAMS Financial Group Pty Ltd ABN 30 105 207 538 (RAMS),  Westpac Banking Corporation ABN 33 007 457 141 (Westpac) or their related bodies corporate. This article is strictly for information purposes only and neither RAMS, Westpac nor any of their related bodies corporate make any representation as to the accuracy or completeness of the information in this article or endorse the views expressed in it.