Where to start when building a house?

KathleenandCraig · May 11, 2013 4:59 pm

Hi Everyone ::smile::

New member who is looking for some wisdom!

A little background. We moved to Adelaide from the UK last September on a business Visa. We thought it would be a nice 2-4 year stay and then we would be heading back to the UK. Well 8 months into that journey we have fallen in love with Australia and my employer has been quick to get us to apply for permanent residence. We are in the final stages of that process (hopefully next 2-3 months it will be approved).

We are renting a property at Craigburn Farm just outside Blackwood and the area has been one of the things we love the most. So as anyone local may know there is a development here at Blackwood park which would be perfect for us. The house we are renting is on node 1, but node 2 seems to be in full swing now. We have started visiting the display homes and land sales office and have made the decision that building a house rather than buying a property is our first choice.

I guess our question is where do we start in this what we are sure will be a long process? It seems from what we have seen so far on this forum and other websites that we may need a land loan and a construction loan (or one that covers both). How much deposit will be needed to qualify for these loans? We don't perceive making a move until after getting permanent residency but will the fact we are new to Australia be a problem or mean further stipulations on the loans etc? Finally is there anyone out there who have views on Dechellis homes and Scott Salisbury homes? Those are the 2 we have been impressed with when visiting their display homes.

As stated we know we are at the start of a long process and are looking forward to spending a lot of time on this forum over the coming months (and years). Any help at this stage will be appreciated.

Cheers

Craig

1sttimebuilding2012 · May 11, 2013 5:32 pm

It terms of a deposit, some lenders will let you borrow with as little as 5%, having said that though they take out mortgage insurance which goes on top of your loan. Ideally so you don't have to pay mortgage lenders insurance you need 20%.

You can then approach a bank and ask for a pre approval amount, that way you know your budget... The pre approval usually only lasts for 3 months. Knowing your budget you can then go shopping for land, keeping in mind the budget remaining for your home. Generally allow $100000 on top of base price to get something liveaable ie. driveway, turf, flooring... Etc.

Hope that helps you get started...good luck!

hachy · May 11, 2013 5:35 pm

it may take a good 6mths from signing a building contract until the build actually takes place. sometimes longer depending on land settlement or other factors.
are you looking at land first then deciding on a house plan that fits your block of land or are you doing it the other way around and looking for a houseplan you like and finding land that it fits on?
you do need a land loan and construction loan but it can all be rolled into one.
the deposit you need will vary depending on who you finance through there are some places that do low percentage deposits.
not sure how being a new resident to australia works when it comes to building a house and finance, i think you need to discuss your options and financial status with a broker to see what you can borrow/afford/need to save etc.

sorry i dont know anything about those builders, we are building with hickinbotham.
if you google them a site should come up where people write reviews on builders good and bad ,also you could try typing them into the search area of the forum to see if anyone here has built with them.

Gristy · May 11, 2013 5:36 pm

I can recommend my broker, just shoot me a PM, i would start there, they can explain all the options before you move on anything.

Onewheel · May 11, 2013 6:33 pm

I agree with others about checking with a bank or a broker to see if you can borrow money to fund your home. The more deposit the better. As already said, if you don't have enough deposit, then the banks will require you to take out mortgage insurance, which is a one off fee. Banks like to see stability, so if you have been here less than 2 years, same with employment, then best to check with a broker who often will have lots of lenders on their list and will know which one will suit your situation best. Lenders also like to see that you can service a loan, so having a regular savings history will help a lot to show you can pay the mortgage payments each month.

I suggest if you are asked to sign any land or house contract, make sure it has a clause "subject to the buyer obtaining finance", just in case you have difficulties.

Good luck

KathleenandCraig · May 11, 2013 11:46 pm

Thanks for all the speedy and useful replies. Sounds like financial advice is needed before we do anything!

Mclaren · May 29, 2013 12:11 pm

Hi - welcome to Oz!! We built with Dechellis and while the house is beautiful their customer service and tradies leave a lot to be desired ... we looked at Scott Salisbury but the minimum price to start at that time was $300k so out of our range .... Good luck with your plans ::lol::

71monaro · Jul 09, 2013 9:34 pm

Hi KathleenandCraig,
hope you had good advice from banks and were not put off. We bought land in Node 1 that we liked (high side, wide front) and designed the house ourselves to suit. This was after spending considerable time with Scott Salisbury and we would still recommend them, as they tried really hard to meet all out budget limitations. We ended up doing our own plans, tendering it out, and using JP Premier, a small boutique builder, they allowed us to have a lot of input into the whole process and worked out well. Love the area.