Things to Consider Before You Build Your Home

Building a home sounds exciting, as it allows you to create your dream home from scratch and ensure every room suits your unique needs, preferences and lifestyle. However, it is a major decision that requires thorough planning and thoughtful consideration. So, before you get too excited and don a hard hat, let us help you weigh several factors, including location, budget, style, and design, among others. 

Budget Realistically

Before you even start sketching your dream home, there’s one thing you should tick off your checklist: establish a realistic budget. It depends on your specific situation. For instance, the cost to build a house on your own land will likely differ from buying house-and-land packages that allow you to customise the property from the get-go. Also, you will need to factor in council fees, design and engineering costs, additional costs like landscaping & fencing and potential unexpected expenses. It’s wise to add a buffer of 10 to 20% to your estimated budget for unforeseen circumstances.

Explore Your Financing Options

Construction loans work differently from standard home loans. They’re typically released in stages as your build progresses, also known as progress payments. They can also be seen as riskier than typical mortgages; lenders might require at least a 20% deposit for construction loans. The potential loan amount may likely be based on an estimate of the assumed value of the completed property, so it’s vital to work with a builder who can provide a detailed plan to boost your chances of getting a higher loan.

Familiarise yourself with how construction loans work before shopping around for the best rates. Consider speaking with a local mortgage broker who knows the ins and outs of applying for construction loans to explore your options fully.

Choose the Right Location

The adage “location, location, location” holds true when building a home. It’s good to pick a location near schools, shops, and public transport, but it’s better if you can build a home in an area with great capital growth potential. Homes built in areas flagged for growth with access to essential amenities and surrounded by good neighbourhoods will likely increase in value over time. For instance, East Launceston & East Devonport are some of the best suburbs in Tasmania to invest in, thanks to the affordability and capital growth potential of real estate in those areas. So, if you plan to sell or rent out your home, spend ample time researching the right location. 

Engage a Reputable Home Builder

Your choice of builder can make or break your home-building experience. Apart from the fact that they’re the ones working on your project, their experience in providing detailed plans matters when you’re applying for construction loans, as mentioned above. So, do thorough research and check licences & insurance. Don’t hesitate to ask for references from past clients to see whether they’re easy to work with, gauge their expertise and determine if they’re the best fit for your home-building project.

If possible, talk to at least three builders and get written quotes for your project. Keep in mind that the cheapest quote isn’t always the best choice. Even though price is important, you should hire a reliable home builder rather than the cheapest. 

Design for the Future

Since you have a hand in designing and building your home from scratch, consider thinking long-term. Will this home suit your needs in five, 10, or 20 years? Consider factors like family growth, ageing, and potential lifestyle changes. While there’s nothing wrong with following the latest home design trends, there’s also value in incorporating flexible spaces and universal design principles to future-proof your home. Talk to your architect and builder about this to explore all your design options. 

Energy efficiency in home design matters, too. In Australia’s climate, energy-efficient design can lead to long-term savings. Consider factors like orientation for natural light and ventilation, insulation, and energy-saving appliances. While these might increase your upfront costs, they can lead to huge savings on energy bills over time.

Don’t overlook outdoor spaces. Collaborate with your designer, architect and builder to consider how you’ll use your outdoor areas and integrate them with your indoor spaces. Well-designed outdoor areas, like luxury patios and lush gardens, can significantly enhance your lifestyle and add value to your home.

Understand the Building Contract & Plan for Delays

Before signing anything, ensure you fully understand your building contract. Pay extra attention to details like timelines, payment schedules, and what’s included (and excluded) in the price. More importantly, don’t hesitate to seek legal advice if anything is unclear.

While we’re on the topic of contract, make sure your builder has clear plans or terms about potential delays. After all, building a home doesn’t usually go exactly to plan. Weather delays, supply chain issues, or unexpected site conditions can all impact your project’s timeline. Also, build some flexibility into your plans while the project is in progress, especially if you are currently renting or need to sell an existing property.

Summing It Up

Here’s the bottom line: don’t rush building a house. It’s a huge undertaking that requires careful planning and consideration. Explore every factor listed here to be more prepared to create a home that meets your needs now and into the future.

More importantly, don’t hesitate to seek professional advice. You need all the help you can get from financial advisors, mortgage brokers, builders, and designers to ensure your dream home-building project is nothing but a success. 

If you need more guidance in applying for construction home loans and exhausting all your financing options to build your home, contact Deltos Finance today. Our mortgage brokers in Tasmania are ready to point you in the right direction.