Building your own house can be an exciting prospect. For starters, you get to own something that has not been changed or ruined by someone else. Not to mention that you get creative control over the plot of land, the floor plan, the main features, and the overall feel of the structure.
However, before you fully dedicate yourself to browsing and comparing house plans, you should be aware just how much you can safely spend on your new home. Don’t rely merely on tips from family and friends. Neither should you depend on the total transparency of your banker or lender. Make it a point to talk to your financial advisor or accountant. Also, expect to go over by at least 10 percent of your estimated budget.
While it might be hard to avoid unforeseen expenses, educating yourself beforehand can help you build that extra cushion and stick more closely to your budget. Here we’ve listed potential hidden costs you should know about:
Home Loan Fees
When looking for a mortgage, it’s important to compare different home loan packages and study the extra charges that apply to each product. Look out for packages that don’t have any application fees. Mortgages that have low or no upfront fees may not have all the inclusions you need or may have higher ongoing interest rates. We suggest you speak to our friends at UNO Home Loans who can compare options from up to 25 different lenders, both small and large mortgage providers.
Stamp Duty
Apart from registration and taxes, there are a few other government fees you should look out for such as stamp duty rates, which vary from state to state. In the case of a new house design and building, you need to pay stamp duty only for the land so it will be cheaper than if you’re buying a finished structure. If you are interested in learning more about concessions you may be entitled to, make sure you check out this article. Remember that some of these may be changing as of 30th of June.
Legal Charges
Since there is no official amount for conveyancing, rates will vary between conveyancers and solicitors. You will also be charged for disbursements in addition to legal service fees. To have a realistic idea of the total amount you’ll be paying the advisor, request an itemised statement of account. For a fixed cost to conveyancing, you should definitely speak to Titlexchange. They offer fantastic options for your conveyancing needs, as well as building contract reviews.
Lender’s Mortgage Insurance
You are likely to incur this if you are borrowing over 80 percent of your loan. This is paid directly to the bank since your loan would be carrying more risk to them. You may be required to pay this upfront or it can be added to the loan. Just ask your mortgage broker or bank about the details.
Interest Repayments
Whether or not you’re going to be moving into the new house soon or not, you need to start paying the loan in accordance to the terms you agreed with your mortgage provider. If you cannot relocate right away, this could mean that you will be paying both your rent and mortgage. So, do consider carefully any mortgage you take out, especially its interest rate and its payment structure. The idea is not to saddle yourself with costly loan repayments in the months to come.
Road Closure Fee
Here is yet another government fee that you may incur. However, this only applies if the builders are required to interrupt traffic or close a road during construction. The building company you’ve chosen through iBuildNew should be able to provide you with the details regarding this. Or, you can ask your state government or local council about it.
Building your dream house involves a lot more than browsing through home plans. You need to think about your budget and prepare for any hidden costs you encounter along the way. Fortunately for you, we’ve got you all covered for the first part here at iBuildNew. We work with some of the top builders in the country so you can be sure you get a house design that suits your tastes and needs.
In addition, our local team of phone consultants know all about the home construction industry so you can ask them anything and everything about finding the right builder and even about the hidden expenses discussed above. Get in touch with them on 1800 184 284 or you can book a call online.
Let us do the legwork for you.
- We’ll ask the right questions to better understand your needs
- We’ll create a recommended shortlist ideally matched to you
- We’ll answer specific questions or concerns related to home building, land purchasing or financing
1800 184 284
