The Mortgage Supply Co | 29 Apr 2019 | First Home,Building Home

Building Your Own Home (What You Need to Know)

The Mortgage Supply Co | April 29 2019 | First Home, Building Home

Building Your Own Home (What You Need to Know)

building your house

According to ANZ economists, people are becoming more inclined towards building their own house rather than buying an existing one. As the saying goes, "if you want something done right, do it yourself."

"Building has become more attractive relative to buying and consents have risen accordingly," they say.

Although it's a good idea to take matters into your own hands, there are some things you need to keep in mind to ensure your dream house is built on schedule and within your chosen budget.

1. Ensure you are working within the Building Code 

Since you're building your own house, you are obligated to make sure that all your actions relating to the build comply with the law.

Here are a few key legal issues you need to know:

  • Building on an empty section can be complicated, whether you build a new house or move an existing house on the section. It requires more paperwork and legal formalities.
  • You need to be aware of land use restrictions, resource consents, and district plan rules. Find out more.
  • You have to review your plan and budget before you apply for a building consent. If you want to make changes after the consent is issued, you'll need to apply for a variation and pay an additional fee.

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2. House and land packages (Turnkey)

When it comes to house and land packages, it's the design and construction companies that do most of the hard work, taking care of everything from consents to the actual building process.

Although you get a range of build and design options offered by the developer, you still have some flexibility to personalise your home. For example, you can choose the wall colours, flooring material, and much more.

One of the biggest limitations of house and land packages is that it narrows down the choice of where you want to live because the location is chosen by the developer.

3. Building from scratch


This is when you have complete control over your dream house. You buy the section, you get the building consent and you manage the project!

With the help of an architect, an interior designer and a builder, you can plan out exactly what you want and then watch your dream house become a reality.

Although this approach enables you to have all the features you want in your home, it is also the most expensive way. Expect delays and extra costs – the location and home is unique to you & fit for purpose.

4. Kit-set homes


When it comes to kit-set homes, a plan and all the materials that you need to build your personal home are provided – down to the smallest items, such as kitchen and bathroom fixtures.

You'll need to buy a suitable section, complete the legal formalities, and then the builders and tradesman can assemble the building materials for you.

This is typically the most cost efficient building method, not to mention you're more likely to get a fixed price on the construction. Kit-set homes by nature have a shorter build time, but this is subject to weather, suitability of the section and other factors.

Every option has it's own pros and cons. Although this is a lower cost and speedy option, there's little-to-no room for personalisation as all the materials will already be designed and manufactured offsite.

5. Financing the build


You'll probably spend more energy in planning the finances than any other aspect of building your home.

Getting construction finance is subject to further scrutiny from the lender.  Some of the additional requirements are, a full set of plans, building permits and consents, and builders’ insurance.

Depending on the type of build, there can be regular partial draw downs based on a valuation at each stage funding is required. It's necessary that the lender release money at the right time, so that the builder gets paid without delay.

Each type of build has different requirements from the lenders. Banks love fixed price contracts, it allows them greater certainty over the outcome and reduces the chances of cost blow outs that they might have to help you fund.

Banks tend to lend to a lesser degree on labour only builds (where you buy the materials and pay on an hourly rate basis to the builder). While labour only builds can save you money, it can be prone to cost increases due to outside influences. Kit sets or relocatables again are a specialised lend, as often you need to pay out on the house or the offsite build before its on the land and has any sort of security value to the bank. It’s a catch-22 that we can help you with.

These are why you need to find the right lender from the very beginning and it all starts with talking to an experienced Mortgage Broker at The Mortgage Supply Co.

We know who’s hot and who’s not, and will take your loan application to the right provider at the right time.