When it comes to financing a new build, whether it’s an apartment, townhouse, or house and land package, there are certain quirks to consider that differ from buying an established property. It’s crucial to grasp these from the beginning so that you can quickly seize the opportunity once it arises. Consider these key factors when determining your budget and what you can afford in the long term.
1. Finding out how much you can borrow
The first step when working out your home budget, is to determine your borrowing capacity. To do this, it is advisable to consult with a bank or mortgage broker. These professionals will consider factors like your income, savings, assets, and expenses to calculate the maximum loan amount you qualify for. However, it’s important to note that the maximum borrowing limit provided by lenders shouldn’t necessarily be considered as the amount you should borrow. It’s crucial to consider the long-term implications of bigger loans, as they come with higher mortgage repayments.
2. Consider the Location
When evaluating new builds, the location is a pivotal factor in aligning with your family’s priorities. Consider whether you desire accessibility to public transport or major roads for easy commuting, proximity to the hills or coast, a vibrant community with parks, or nearby café and dining options. By doing so, you can assess which locations around Perth will suit you best and begin researching property prices in that area.
3. Ask about estate rebates
When buying land or off-the-plan property in a residential land estate, it’s essential to ask about rebates. These rebates can include complimentary boundary fencing, front and/or back landscaping, sustainability features like rainwater tanks, and even cash back offers or incentives. Understanding the offers available in each land estate is important as they can lead to significant savings on your final home price.
4. Understand levies and rates
Owning a home entails various costs, including council rates, strata fees, and insurance, which should be factored into your overall financial plan. In some cases, new developments may have special area levies on top of standard council rates. These extra fees are justified by the superior community facilities, such as high-standard parks and buildings that residents have access to. Keep in mind that the location within a development can also affect costs. For instance, being within a certain distance from the coast or in a bushfire zone may require additional expenses to meet specific building standards. It’s always a good idea to ask your developer and builder about any potential extra costs associated with building in your chosen location.
5. Understand your house inclusions
To make an informed decision about purchasing land and building your new home, it’s critical to understand the inclusions in your house design. When engaging with home builders, don’t solely rely on advertised prices; instead, ask about the specific inclusions for your new home. Keep in mind that many advertised home prices may not include items like carpets, air conditioning or curtains. If these items are not included, it’s important to budget for them separately upon completion.
6. Grants and incentives
Buying or building your first home may be more affordable than you think. In fact, you may be eligible for a range of government grants and incentives designed to help WA’s first home buyers get into their own home sooner. From the $10,000 First Home Owners Grant, stamp duty concessions and other government incentives such as Keystart, see a full break down of the key grants and incentives available in our blog here