Alright so you’re fortunate enough to be in the position to buy or build your first home. You’ve chosen your builder and figured out where you want to build and what kind of house it will be – now comes the tricky stuff.
Financing your first home can be a daunting process, but there are steps you can take to streamline everything which will then put you in a strong position to move on to getting your home built. Read on below for a few tips regarding financing your first home:
1. Establish your current financial situation
Creating a budget and analysing your current financial position isn’t just a smart thing to do, it also has a huge variety of benefits when it comes to managing your money, and also your lifestyle. It’s also an essential process when it comes to working out how much you have to spend on building a home.
Pulling together a basic budget is relatively easy too: combine your current salary along with your partner’s (if you have one) to get a total household income, and add that to whatever combined savings you have that can or will be contributed towards a home deposit.
From there figure out your regular outgoings like:
- Weekly (rent, groceries, fuel, gym memberships, car repayments)
- Monthly (phone bills, credit card or loan repayments, subscriptions like Netflix)
- Longer (gas and electricity, car rego, insurance fees)
2. Figure out how much you can borrow (on your own)
Now the picture is getting clearer, it’s time to get an idea of how much you’ll be able to borrow to get the build underway. As much as we’d all love to have the money outright to build a new home, chances are you’re going to need to borrow some money to do it.
All of the major banks have home loan calculators, and New Generation Homes have a borrowing calculator of their own via THIS LINK – it’s easy to fill out once you’ve ticked off the steps above. From there New Gen’s in-house finance team will be able to work with you to find the best home loan options to suit you and your repayment ability.
3. Seek assistance with choosing the right home loan for you
Once you’ve collected the above, it’s time to call in the experts to help you understand things a little better. If you’re working with New Generation Homes, your New Home Consultant will introduce you to an in-house Mortgage Broker from Westgate Financial Services who will be able to help you determine exactly how much you should be saving and spending on a week-to-week basis and what your maximum borrowing capacity will be.
With your budget for your house and land now determined, your New Home Consultant will then be able to advise what is achievable in terms of location and house design for your build, with an eye towards helping you find the right compromise between budget capabilities and lifestyle desires.
4. Commit to that budgeting plan and stick with it
Arguably the most important aspect of financing your new home that gets discussed the least is commitment. You may develop a great plan with the help of your mortgage broker, but it counts for nothing if you don’t stick to it.
Maintaining reasonable budgets and sticking to the plan is likely going to require some sacrifices on your behalf, along with diligence and some inspiration along the way. If you’re looking for further help and guidance along the way, there are a plethora of fantastic Australian-based finance podcasts to listen to, like My Millenial Money, What The Finance and She’s On The Money.
Once you’ve completed these four crucial steps, we’re over the halfway mark to having your new home ready to live in. Next steps include laying down your deposit and the all important Prestart phase.
Head to New Generation Homes to get your new home dream started!