When you have the desire to build your dream house and are fantasising about the indoor pool and stairway slide; keep your feet on the ground and a budget in mind.

There are a number of things to consider before choosing to build a new house instead of buying an established property. Firstly, make sure your needs are provided for in the area in which you buy (think long term); Do you need schools nearby? Do you need public transport? Is it near work? Is it close to family and friends? If you are buying in a well-established area there may be limitations as to the amount of land available on the market; you may need to consider purchasing to demolish and re-build.

There are many advantages to building your own home; none more important than you get exactly what you want! There is no compromising of room size or closet space, the vision may only be limited to your budget and creativity.

Another thing to your favour is you only need to pay stamp duty on the land rather than the house and land.  As well as this saving, you can be assured that new energy codes also make new homes more efficient and better for the environment. Your new home will also come with a warranty which may cover you if something goes wrong.

When you apply for your construction loan remember you will only have 12 months to build. Keep a timeline and evaluate time spent on council approvals, design plans and possible weather related delays.

Some costs which you will need to be on top of are legal costs, borrowing costs and insurance. These costs can all add up so it’s important to keep track and create a realistic budget.

Make sure you are working with a qualified builder and discuss the project carefully. Consider a ‘lump-sum contract’ instead of a ‘cost-plus contract’; a lump-sum contract specifies a fixed price and puts the risk of running over budget on the builder instead of the buyer.

Once you have your pre-approved loan amount plan vigorously to achieve your dream home and don’t forget to find some money for landscaping to finish off your dream project.

Building your own home is a very satisfying and exciting opportunity, however getting exactly what you want may cost a considerable amount more than purchasing an established property. Be prepared to work a little harder to make your dream come true.

For construction loans, investment loans, refinancing and mortgages: contact DFG Wealth (03) 5976 8426