Securing Finance for Your Home in 2019
The first step in your home building process is to visit your local financier.
With banks tightening credit conditions, it’s important to be aware of what cost the build is going to involve, what your capacity to borrow is and what your repayments will be based on your chosen budget.
We talk to Stroud Homes Port Macquarie builder Joel Freeman to find out more about securing finance for your new home build this year.
When deciding to begin the process of constructing your new home, you will need to sit down and budget for a few things.
You need to budget for the land, for the site work required to build on the land, the cost of the build for the design you have chosen and the stamp duty on the land.
New South Wales Stamp duty (also known as Transfer Duty) is basically a tax on the transfer of property, payable to the NSW Government by the buyer of the property.
You will need to gather your personal finance details (for example pay slips and tax returns). You will also need a fully inclusive quote from a builder and the land details.
Additional info required:
A pre-approval is the first step towards unconditional approval and is an indication of your ability to borrow. It usually last for 90 days but can be extended for another three months in most cases.
If the 90 days lapse, the application may need to be re-submitted, however, this usually only requires minimum documentation updates before being approved again.
It is important to note that pre-approval may still be subject to some conditions, a suitable valuation of the purchased property being a common one.
Joel Freeman with happy customers Mike & Marion ready to build their new home
To gain finance in the first place, and in the absence of a guarantor, banks usually require an 8% deposit on the total investment.
Once finance has been approved, building contracts can be signed.
Usually a 10% deposit is being paid to the builder upon contracts being signed which allows for council lodgement, and the commencement of work following the council approval.
Yes, it does. If a client requests a variation to the build in the HIA contract they have signed, there are provisions for variations if they choose to change their mind on certain parts of the build throughout the process.
Stroud Homes Port Macquarie works with independent mortgage brokers who are fantastic at making sure that you are getting the best deal from the bank. So even if you have your finance in place, why not compare.