Extra costs to include in the construction loan

Trina · Oct 17, 2007 7:37 pm

Hi there,
we are just about to begin construction on our house and have to give our bank the final amount we want to borrow.
I have heard from other first time house builders that they regretted not borrowing a little extra for the additional costs following construction.
The ones I have thought of so far are:
Cementing driveway and front porch
Carpet and floorboards (not included in our contract)
Connecting services like phone etc
Blinds

Can anyone help with giving rough estimates on how much these cost them?
Also have a missed any obvious ones?

thanks for your help
Trina

Cookiemonster · Oct 17, 2007 8:19 pm

Trina

Hi there,
we are just about to begin construction on our house and have to give our bank the final amount we want to borrow.
I have heard from other first time house builders that they regretted not borrowing a little extra for the additional costs following construction.
The ones I have thought of so far are:
Cementing driveway and front porch
Carpet and floorboards (not included in our contract)
Connecting services like phone etc
Blinds

Can anyone help with giving rough estimates on how much these cost them?
Also have a missed any obvious ones?

thanks for your help
Trina

We've allowed:
Driveway - $60/sqm
Carpet - $200/sqm
Timber floor - $150/sqm
Window furnishing - $500 per window.

off2theburbs · Oct 17, 2007 8:32 pm

Landscaping for the back yard ?? are you doing yourself or getting a landscaper

stonecutter1309 · Oct 17, 2007 8:35 pm

I thought the bank only lent based on what is in your contract with your builder? (I may be wrong - I spoke with my mortgage broker about this 12 months ago!)

Trina · Oct 17, 2007 8:42 pm

Thanks for your replies

Stonecutter - we can borrow 95% of the valuation of the house & land so have a bit of room to add in extras.

As for landscaping we are planning on doing it ourselves (being tight where we can!)

Thanks again.

ahuang · Oct 17, 2007 10:55 pm

The quote we got for telephone is:
$300 to connect to Telstra (dig undergound) and that includes 1 telephone point, then $80 for every extra telephone point.

ahuang · Oct 17, 2007 10:58 pm

I think it's good that you have included most of the "essential" stuffs required when you move it. Other things like lights, landscaping, .plasma TV, ..etc are not so urgent can wait a bit longer...

mattwalker · Oct 17, 2007 11:12 pm

Letterbox
Clothesline

Retaining walls
External window furnishings (awning blinds etc)

PhoenixStar · Oct 17, 2007 11:27 pm

Hey Allan, don't forget that most cordless phones only need to be connected to one point and then the rest need only plug in to power. So a whole house can run on one point, just multiple handsets. Might save you some $$

mattwalker · Oct 17, 2007 11:38 pm

Phoenix,

Ahhh but.

If you have an alarm system you need a point

If you use foxtel you need a point

If you use the internet you need a point

If you use the phone you need a point (usually 2. 1 for either end of the house or upstairs downstairs)

PhoenixStar · Oct 17, 2007 11:51 pm

Matt, but for the alarm (if it is a back to base set up) and internet (if you are not going cable) then you need a seperate number, not a seperate point don't you?

Our alarm at the old place needed a seperate no to check the connection once a week and to ring the base centre.

We had optus digital but didn't connect it up to the phone.
But our last place, the fax and alarm shared a seperate number to the home line.

Isn't there a better way than to keep making the telco's richer with connections and monthly fees on seperate lines???

rldragon2003 · Oct 18, 2007 11:01 am

Trina

Hi there,
we are just about to begin construction on our house and have to give our bank the final amount we want to borrow.
I have heard from other first time house builders that they regretted not borrowing a little extra for the additional costs following construction.
The ones I have thought of so far are:
Cementing driveway and front porch
Carpet and floorboards (not included in our contract)
Connecting services like phone etc
Blinds

Can anyone help with giving rough estimates on how much these cost them?
Also have a missed any obvious ones?

thanks for your help
Trina

Why don't you set up a VIRIDIAN LINE OF CREDIT (CBA) or similar, which give your a maximum limited. Then you can spend whatever you want under that limit. Most of time you will get free application, but you have to pay the stamp duty on maximum limit, not the actually spending.

Amber · Oct 18, 2007 11:04 am

After not doing it ourselves, I would definitely recommend getting some additional cash for landscaping!

We are having to do ours in stages (as spare money is available) and I wish I could have turned back time and taken out $10k extra to get it all finished.

That's what we get for getting married and building at the same time I guess!!!

ahuang · Oct 18, 2007 11:38 am

**Phoenix**

Matt, but for the alarm (if it is a back to base set up) and internet (if you are not going cable) then you need a seperate number, not a seperate point don't you?

Our alarm at the old place needed a seperate no to check the connection once a week and to ring the base centre.

We had optus digital but didn't connect it up to the phone.
But our last place, the fax and alarm shared a seperate number to the home line.

Slightly off topic...

If you are using ADSL (instead of cable modem), you don't need a separate number. ADSL modem can use the same telephone connection without a new number as it's using different part of the frequency. You just need to install a filter on the normal phone to filter out the noise.

May be some other experts can clarify about the alarm part. Does a back to base alarm system require a separate number or can it use the same number??

rldragon2003 · Oct 18, 2007 11:48 am

Quote:

If you are using ADSL (instead of cable modem), you don't need a separate number. ADSL modem can use the same telephone connection without a new number as it's using different part of the frequency. You just need to install a filter on the normal phone to filter out the noise.

You may can replace the physic phone line, with wireless broadband & IP phone. And you can save the $300 and on-going line rental fee.

arkraider · Oct 18, 2007 11:53 am

I know that with our phone lines at home, we have two, primary phone combined with ADSL for internet and the second line is for fax and alarm system.
We had the alarm installer set the system to do it's phone check at 3.00am so the line is never busy obviously. That way we are never on the phone.
Our alarm will also cut the line if the line is busy and dial back to base, also programmed when installed.

Two seperate lines is the way to go.....Three if you have the money and don't care though.....

First_Timer_Ray · Oct 18, 2007 9:19 pm

rldragon2003

Quote:

You may can replace the physic phone line, with wireless broadband & IP phone. And you can save the $300 and on-going line rental fee.

It'd be cheaper to buy a phone and still have a phone line... do you know how much wireless broadband is??? We tried it (T3lstr@ NextG 256kbps), and used 500MB in one week, and with only 1GB download per month for $50 odd, and excess charged, we would have been up for over $150 for one month regular internet usage. Thank goodness they let us cancel and only charged us for what we had used (10 days cooling off).
We were fortunate enough to [finally] get ADSL - unlimited 1500kbps for $60/month. Add $30/month line rental (not phone rental), and we're still better off.

[edit] P.S The wireless modem costs $250 anyway!!! [/edit]
Ray.

First_Timer_Ray · Oct 18, 2007 9:26 pm

Sorry, forgot to add about the initial post topic!

I don't know if it's worth it... I suppose it depends how desperate you are to get these sort of things done. If it's in your home loan and you don't pay it off as extra payments, all of those extras are being charged at +7% interest over possibly 25 or 30 years. Then again, if it's just going to go on the credit card (+17%) and take forever to get paid then it may be better option to tack it onto the home loan. I think you just need to weigh up if it's going to end up costing you a fortune (eg, $5,000 carpets end up costing >$10,000). Ideally if you are able to save in addition to paying the mortgage, "interest free" deals may be a perfect option... just pay them by the due date!!!

Ray.

brittany · Oct 19, 2007 9:52 pm

So far extra costs we've had apart from the builder have been

demolition
put in a power pit
remove huge tree from site
had to have a re-establishment survey to determine exact fencelines
second soil test
remove old electricity meterage
asset protection for demolition

rerob1 · Oct 20, 2007 11:54 am

Amber

After not doing it ourselves, I would definitely recommend getting some additional cash for landscaping!

We are having to do ours in stages (as spare money is available) and I wish I could have turned back time and taken out $10k extra to get it all finished.

That's what we get for getting married and building at the same time I guess!!!

Thats why we are putting off having a big wedding until after the house is finished!!

Quote:

I don't know if it's worth it... I suppose it depends how desperate you are to get these sort of things done. If it's in your home loan and you don't pay it off as extra payments, all of those extras are being charged at +7% interest over possibly 25 or 30 years. Then again, if it's just going to go on the credit card (+17%) and take forever to get paid then it may be better option to tack it onto the home loan. I think you just need to weigh up if it's going to end up costing you a fortune (eg, $5,000 carpets end up costing >$10,000). Ideally if you are able to save in addition to paying the mortgage, "interest free" deals may be a perfect option... just pay them by the due date!!!

Couldn't have said it better myself Ray! We are saving as much as we can now to cover extras!!