One of the great things about constructing your own home is that it can be tailored to your specifications. If you’re interested in building rather than buying your dream home, here’s the process you need to follow:
- Speak to your broker about your goals, so you can create a finance plan together
- Buy the land
- Design your home
- Find a reputable builder
- Obtain building permits and approvals
- Build the home
With a traditional home loan, you receive the money in one lump sum; but with a construction loan, you receive the money in five stages throughout the project. You pay interest-only on the portion of the funds you’ve received to date, rather than the whole loan; and at the end of the build, your loan reverts to a traditional principal-and-interest mortgage.
It’s worth noting that the rate of annual growth in house-building costs increased from 3.9% in September 2023 to 4.3% in June 2024, according to the Australian Bureau of Statistics.
Given that costs will likely continue to rise, the sooner you build, the cheaper it could be in the long term. If this is something you’re thinking about doing, you should explore your options soon.
