07/29/2016

Are you prepared for the hidden costs of building a new home?

Are you prepared for the hidden costs of building a new home?

There are a number of reasons you may decide to build a new home rather than purchase an existing one. You might be an investor wanting to get on board in a new growing neighbourhood, you could want a bespoke home with all the features you are after, or it may even end up being cheaper than buying an established property.

However, if you’ve already started hashing out a budget for your new build, you might be missing out some pretty important parts that could run your mortgage repayments¬†thinner than you’d like. So, if you’re one of the thousands¬†of people that the Australian Bureau of Statistics reports commit to a construction loan every month, here’s a quick rundown on some things you may not have anticipated.

Bushfire Attack Level

If you have decided to build in a bushfire-prone area, you are legally required to adhere to certain requirements to ensure that both your new property and surrounding neighbourhood are safe from this deadly disaster. Depending on your risk level, this could add thousands of dollars of additional materials and construction work to your build. Make sure you ask your construction company and check with the local council if this will apply to you.

Site costs

Site costs are a general term ranging from water and electricity connections to local and federal building law compliance. This is a variable amount, depending on your choice of area, and could end up tacking on tens of thousands of dollars in extra expenses. Keep an eye out for this often-overlooked factor when looking for building finance, otherwise you could end up having to pay out-of-pocket just to get the water running.

Essential furniture

You may already have a plan for things like beds, cabinets, kitchen worktops and appliances, but have you remembered the curtains? How about the carpet? Even if you are going for natural wood flooring, that might not be included in the final construction estimate from your builder. Planning a new home is making sure you consider absolutely everything. Go through your current home and make a comprehensive list of all (and we do mean all) of the things you’ll either be throwing out or leaving behind. You could discover you have forgotten something essential.

Once you have all your preliminary plans in place and a solid construction quote, you can then discover how much you’ll need to borrow from your lender. Remember to get in contact with us to discover the full range of financing options available to you!