Planning to build a new home but not sure what’s involved? This infographic will help!
There really is nothing quite like the thrill of planning, building and moving into a brand new home that’s all your own – from the choice of site through to the layout and fittings.
It’s not just an opportunity to build your true ‘dream home’; it’s also a unique chance to kit your home out with the latest appliances, designs and fixtures and of course you’ll be the first person to enjoy it all. It can even have benefits for investors as a new build can provide generous depreciation deductions.
Amid the fun and rewards of planning for your new home comes a whole range of important decisions. Most building contracts specify five distinct stages of construction, and your builder will expect to be paid a specific percentage of the total building cost on completion of each stage.
Here’s a snapshot of the five stages of building a home.
A traditional mortgage involves borrowing a lump sum of cash with interest charged on the full balance from day one, which is great if you’re buying an established property. However a typical home loan may not be suitable if you’re building a new home.
A ‘construction’ loan has useful features when you’re building a home from scratch. Different to standard mortgages, construction loans typically allow the mortgage to be drawn down progressively in line with each construction stage, so you’re not paying for money you haven’t yet spent.
It’s a good idea to get expert help from a mortgage broker even before you start looking for vacant land, as they can explain more about construction loans and how they work, and help you find a loan that is suitable for your land and construction needs.
Have you built your home from scratch? Share some insider tips with us in the comments below.
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