Browse Forums Home Finance 1 Nov 16, 2010 4:45 pm Hi! I'm new to this forum We are looking at either buying established and renovating, or building our first home. We really want to build, however the only thing that really concerns us is the money we will be paying out on both rent and a mortgage. I know that we won't be paying the whole mortgage straight away with the construction loan, but towards the end of the build I know we will most likely be paying a large chunk of it. We are currently renting, and I really don't think we could afford to do both. What do people do to be able to afford it? Re: Where did you live when you built? 3Nov 17, 2010 12:42 pm We're renting near where we are building. Now that it's nearing the end of the build we're actually in negative cashflow. So the answer is we're not doing anything to afford it, we're just hoping construction finishes sooner rather than later There's a few good reasons to live near where we're building. 1. Our kids can continue going to the same school/childcare after moving 2. We can check on the house often Metricon Riva 33 - http://herlihy-riva.blogspot.com Site start 15/03/2010 - Handover 23/12/2010 9 months and 8 days (284 calendar days) from site start to handover Re: Where did you live when you built? 4Nov 17, 2010 4:02 pm Thanks for your replies Unfortunately living with family is not an option for us. They live too far away from where we live now, and where the kids go to school and childcare (we want to build in the same area we are living in now). btherl - how are you possibly manage? This is what I'm really afraid of - how can we possibly survive when we are paying so much out? This is the only obstacle that is likely to put the brakes on building our own house. Re: Where did you live when you built? 5Nov 17, 2010 5:43 pm We rented, but we paid our total mortgage repayments on just the land for 6 months prior, just to see if we were comfortable or not. That was along with rent, so now that we don't have the rent, things are much better, and we haven't had a huge change in our outgoings besides that. Re: Where did you live when you built? 6Nov 18, 2010 12:00 pm In the short term we're not surviving - we're building up debt. I've just applied for a credit card with a 2.9% balance transfer for 6 months. So that will let us get the debt at a better rate than our home loan. The trick seems to be that they if we purchase anything on the new card, we have to pay off the transfer first before paying off the new purchases, but we never intend to purchase anything on the card. It's intended as a short term low interest personal loan. If you want to be 100% sure, maybe you can work out a detailed budget, then explain the situation to your builder and negotiate a building timeframe along with a liquidated damages amount that will let you survive if the build goes over time. If you can survive until the building timeframe ends and then have the builder pay your rent from that point on, then you should be fine. You'll need to take into account that the builder is allowed to extend the timeframe if certain events happen though. We would have loved to live with our family but they also live too far away. It's too bad, because we would have saved $15k overall in rent if we were able to stay with them Our loan payments at the start of construction were around $1k per month (land only). They are now up to $2k per month (land + most of a house). This is the period where rent + mortgage adds up to a lot. I'm really hoping our site supervisor is right and we will be in by Christmas! Metricon Riva 33 - http://herlihy-riva.blogspot.com Site start 15/03/2010 - Handover 23/12/2010 9 months and 8 days (284 calendar days) from site start to handover Re: Where did you live when you built? 7Nov 18, 2010 1:07 pm we've put our stuff in storage and will be with the in-laws for the next year Re: Where did you live when you built? 8Nov 18, 2010 1:43 pm is house sitting an option? My friend has done it for 3 years straight.... I think she has moved 6 times or so. There is a website where you can register. No Rent! Building with Life$tyle Homes in Perth SOR Key Dates on First Page of my Thread viewtopic.php?f=31&t=38761 Re: Where did you live when you built? 9Dec 01, 2010 9:24 pm Bottom line is you either need extra savings to cover the additional repayments, or access to extra credit. Make sure you have a safety net - our build ran WAY over time and we ended up renting for 18 months instead of the 6-8 months we'd expected. If you can already see this as a major obstacle, then perhaps building isn't the way to go. Buying an established house or finding a house/land deal with a standard real estate contract deal of 10% deposit and the balance at settlement (they do exist) would be better options. Re: Where did you live when you built? 10Dec 02, 2010 7:32 am We are lucky enough to be able to live at our inlaws while we wait for our build (or wait for it to even start). Unfortunately though, our land was meant to title in June, start building in July and be finished in time for our wedding in late January... But we still havent titled! Looks like we will be spending the first few months of our married life at the in-laws! Thanks developers! Re: Where did you live when you built? 11Dec 02, 2010 8:00 am We are renting, we were hoping to be in by March (when 12 mnth lease is up) but now looks like June. Both parents live 5 and 20mins away, and my parents house is big enough for us all (me, hubby and 2 kids) but to be honest i couldnt think of anything worse than moving back in with parents (or in with the in-laws) we would be ready to kill each other by the end of it. (joke) i dont work either (just had a baby) so hubby is doing it all (our investment place is helping though) Our Acreage Build The Lakeview Lodge - Beechwood Homes 01/04/10 YES 2010 - Deposit paid 23/09 - PCI CANCELLED 28/09 - PCI - will it happen.-18 months later 07/10/11 - ITS OURS..WOOHOO Re: Where did you live when you built? 12Dec 02, 2010 8:02 am kek If you can already see this as a major obstacle, then perhaps building isn't the way to go. Buying an established house or finding a house/land deal with a standard real estate contract deal of 10% deposit and the balance at settlement (they do exist) would be better options. I was going to try and say something along these words, but you said it way better than I Our Acreage Build The Lakeview Lodge - Beechwood Homes 01/04/10 YES 2010 - Deposit paid 23/09 - PCI CANCELLED 28/09 - PCI - will it happen.-18 months later 07/10/11 - ITS OURS..WOOHOO Re: Where did you live when you built? 13Dec 02, 2010 8:22 am We calculated if we could afford our mot gage at double the current interest rates before we bought our current house. So we knew we could cope if interest rates went to 15 % but it also meant that for construction we calculated we could afford it with one mot gage paying interest only and the other as a standard mortgage or we had a spare 10-15k to pay rent. IMO if you can't afford to be paying rent and a mortgage during construction then you can't afford that amount of mortgage/ size house and should save a bigger deposit before doing it. Otherwise you risk losing the house if interest rates keep going higher. Look at the late 80's early 90's. It's realistic to expect at some stage during your 25-30 year loan that interest rates will be at least in the teens just based on history Re: Where did you live when you built? 14Dec 02, 2010 9:05 am Fernyhouse We calculated if we could afford our mot gage at double the current interest rates before we bought our current house. So we knew we could cope if interest rates went to 15 % but it also meant that for construction we calculated we could afford it with one mot gage paying interest only and the other as a standard mortgage or we had a spare 10-15k to pay rent. IMO if you can't afford to be paying rent and a mortgage during construction then you can't afford that amount of mortgage/ size house and should save a bigger deposit before doing it. Otherwise you risk losing the house if interest rates keep going higher. Look at the late 80's early 90's. It's realistic to expect at some stage during your 25-30 year loan that interest rates will be at least in the teens just based on history That's such a scary thought. We could afford our mortgage at 8,9,10%, but any higher and I think we'd be eating rice for breakfast lunch and dinner! I think at 15% it wouldn't be just people building houses, but homeowners in general who will be losing their houses, no matter how big, small their mortgage is! Re: Where did you live when you built? 16Dec 15, 2010 6:55 am We are living with the inlaws. We moved in back in September & our build isn't starting till at least April! It's been really good, but I can't wait to get back into my OWN house Building the Milano30 Site start: 30th June 2011 PCI: 1st December 2011 Handover: As soon as the bank pays! Approx 16th December viewtopic.php?f=31&t=44051 Re: Where did you live when you built? 17Dec 15, 2010 9:43 am We moved into my parents house who live 1 - 1.5 hours away!! I still take the boys to the same daycare so as to not disrupt their routine and lose their spots etc so on the 2 days per week they go to care and I go to work, it's a 2.5 hour car trip (for me) EACH way. Was a shock to the system at first but now we're used to it and it's just what we had to do to make it work! Doesn't mean I don't curse my parents for moving so far away at times though Building an Eden Brae Saville 27 http://karry327.blogspot.com/ Building thread https://forum.homeone.com.au/viewtopic.php?f=31&t=44247 Re: Where did you live when you built? 18Dec 15, 2010 10:35 am Moving in with family is not an option as there are four of us and there simply is not enough room for all of us to move in with family members. Plus, i think i would go crazy! We will be staying at our current house, so we will eventually be paying 2 mortgages until we move in to our new home and can sell this one we are in now! It will be a little of a struggle but it will only be for a short while and all worth it! Building the Porter Davis Sandhurst 33 Our Thread: https://forum.homeone.com.au/viewtopic.php?f=31&t=42820&start=20 Re: Where did you live when you built? 19Dec 15, 2010 11:08 am I too lived with parentals - still had to pay board but much less than rent would have been. Seeing as that's not an option for you have you considered (similar to what Kek has suggested) buying a new home that has already been constructed? A lot of builders sell spec homes and whilst you won't get to choose colors, floorplan etc you do get the advantage of being able to move straight in. Good luck with it all Re: Where did you live when you built? 20Jan 17, 2011 8:13 pm we have finally just organised a roof for over our heads while we build (just finished prestart 2day), after much back and forwarding my mum has offered for us family of 4 to stay with them. (stepdad not so wholly keen on idea), am hoping it will only be for about 4 months 6 months tops. as we still need to sell and ave selling time in our area is about 2 months, then there's settlement, just don't won't to be stuck with 2 full mortgages at the end. if it all falls in a total heap we will try living in the shed for a bit. tho finding this bit the most stressful. viewtopic.php?f=31&t=43238 building with kerdels in gabbadah, wa block purchased april 2010 signed with builder oct 2010 papers signed jan 2011 prestart done 17/01/2011 No the fireplace doesn’t work. It’s been enclosed. I’m not sure what was removed, as it was done quite some time ago - well before what I can see with photos online… 2 11584 DIY, Home Maintenance & Repair We purchased a 1960s property that is on timber stumps mostly, and a newer section is on concrete stumps. We had a building inspection initially and they reported some… 0 12743 Strong enough for what? For linen, absolutely. To climb on, no. I've got similar shelving in my garage and it holds a decent amount of weight. 900 wide shelves will carry… 1 4193 |