Your new home

Build a home or buy off the plan

Which Loan Do You Need?

Build a home or buy off the plan

A construction loan is different from a normal home loan because it can be drawn in stages rather than a lump sum at settlement.
These stages are in line with the stages of construction. Most lenders only ask you to pay interest on the amount you draw down. For instance, if you have borrowed $300,000 for a house and land package, but have only drawn down $125,000 to pay for the land, you only pay interest on the $125,000. It is important to know how much you can borrow before you commit to purchasing land or signing a building contract.
Buying a house and land package can be great value for homebuyers looking for a brand-new home in a growing neighbourhood. Unlike pre-owned property, house and land homes are customised to your needs.

Choosing an estate

New housing estates are commonly found on the outskirts of cities, although some are located in metropolitan areas. Developments take place on two types of site: a greenfield site, which is land that is as yet undeveloped; and a brownfield site, which may have been industrial and now opened up for residential development.
Developers either purchase land that is released by the government or buy it privately. They then subdivide the land and lay down infrastructure such as roads, utilities, water and sewage, before selling off the lots.
It's crucial to make sure a potential home aligns with your lifestyle.
If the estate is new or in its early phases of development, you should also investigate the master plan for the area so that you know about where shops will open, what public transport will be available, where schools will be and access to health services such as hospitals.

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Choose an Estate

New housing estates are commonly found on the outskirts of cities, although some are located in metropolitan areas. Developments take place on two types of site: a greenfield site, which is land that is as yet undeveloped; and a brownfield site, which may have been industrial and now opened up for residential development.

Developers either purchase land that is released by the government or buy it privately. They then subdivide the land and lay down infrastructure such as roads, utilities, water and sewage, before selling off the lots.

It’s crucial to make sure a potential home aligns with your lifestyle.

If the estate is new or in its early phases of development, you should also investigate the master plan for the area so that you know about where shops will open, what public transport will be available, where schools will be and access to health services such as hospitals.

Finding the perfect block

Don’t make the mistake of thinking all blocks of land are the same. They are likely to differ in size, orientation, greenery, gradient and proximity to amenities.

All of these factors can influence the design of your house and the price of its construction.

Importantly, you must ensure your land will be ready to build on.  The land sales consultant will be able to help you with this and you can check with the planning department of the local council to find out if the block is zoned for building, cleared and levelled, and has water, power and sewerage connected so building can start.

Do your research

Next, you need to look into the reputation of the developer and the builder.  Find out about their previous projects and if you can get in contact with owners or residents in their previous estates.

Make sure the bank will find the development acceptable as well.  Lenders have standing instructions to valuers that will ensure it meets their criteria – always sign the build contract subject to finance.

Conveyancors will look at the land contract but the build contract is up to you.

Your building contract should include everything that has been agreed on – and most builders will use either aMaster Builders Contract or an HIA Contract.  Consumer Affairs in your state will have guidelines around the things the contract should include.

BASIC LOAN REPAYMENTS

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HOW LONG TO REPAY

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HOW MUCH CAN I BORROW

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EXTRA REPAYMENTS

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