• 5 steps to building your first home

    Building your first home?  5 steps to help you understand what is involved when planning a new build

  • 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 government grants?

    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 Building Contract. 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 time should I allow to finish the build? 
    • What is the quality of the fixtures and fittings included?
    • How easy is it to vary selections on fixtures and fittings? 

    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’s also important to keep a contingency fund for any unexpected build costs that may not be covered by your loan. 

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    Morphett Vale Souther Vales - Cheryl Haywood

    About the author

    Home Loan Specialist and Franchise Principal of RAMS Morphett Vale – Southern Vales, Cheryl Haywood  has over 20 years experience in the finance industry. Cheryl and her team are committed to providing honest, exceptional service and are driven to help more customers achieve the dream of home ownership.

    Cheryl’s experience is backed up by a diploma of Financial Services (Finance/Mortgage Broking Management) and she has been acknowledged with several accolades including Winner of SA Franchise Woman of the Year (Merit Award) 2012 and Winner of the RAMS Excellence (SA/WA) Award for 2019. 

    Cheryl Haywood

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  • Disclaimer:

    While such material is published with permission, RAMS is not responsible for its accuracy or completeness.  This information is general in nature and has been prepared without taking your objectives, needs and overall financial situation into account. For this reason, you should consider the appropriateness of the information to your own circumstances and, if necessary, seek appropriate professional advice.