As a nation known for its independence and ability to just get things done, most Kiwis fancy their abilities with the tools. Whether it’s doing a kitchen refurb or knocking together the perfect man cave, it’s almost inherent that if we want something, we do it ourselves. So it comes as no surprise that building a home is an appealing option.
‘Doing it yourself’ can be the perfect way to create the home you’ve always dreamt of. However, it’s important that you do your research and understand your options. This will ensure you have complete control over the creative process and achieve a home that is truly unique and hopefully profitable.
What are my options for building?
When building a home, you’ll generally have three main options: home and land packages, kitset houses and fully customised builds.
Home and land packages are a common option for first time home buyers as they can be tailored to personal taste and budget. It’s generally a hands-off approach but you can decide on the design from a range of templates in the portfolio, giving you control over the personal details and finishing touches. Construction is generally completed in a fairly short period of time with a fixed cost outlined at the start of the project.
Kitset homes come complete with all necessary plans and materials needed to construct the house. This option provides owners with a cheap and quick method of building their home.
Generally, the kits leave little room for buyers to customise their plans or materials although these days more and more companies are offering the opportunity to change plans up to fully customised plans and will often even design a plan to fit the site so shop around to make sure you find a company that will work with you. Kitset homes typically require you to purchase the land separately.
Your third option is to build a completely customisable home. Anything you dream of, you’ll be able to construct – within budget obviously. From choosing the building materials to the floor tiles, owners will generally be heavily involved in the entire construction process. Although this option will give you the ability to build your fantasy home, it could also be a lengthy and time-consuming process which often runs over budget.
How can I Finance the Build?
If you decide to build your first home, you will have several options available to help finance the build. We have helped countless families navigate the process of building their first home and we are always happy to discuss the various options available.
Private lenders have various options available for first home buyers to build the home of their dreams. Whether it’s Westpac’s Construction Loan or ANZ’s Build Ready Loan, we can help you find a lender with a structure that fits your requirements.
One important aspect of these loans is that lenders will approve the full amount before construction is underway, and even before you decide on a section. With this option, lenders allow you to draw upon the loan in instalments at pre-arranged intervals. Usually when each stage of the project is complete. The benefit of this is that it means you aren’t paying interest on the full amount until construction is completed, allowing you to manage your finances better throughout the entire process.
Another option available is drawing on your KiwiSaver or applying for the KiwiSaver HomeStart Grant to help fund construction. Previously we have discussed how KiwiSaver can help first home buyers enter the property market.
KiwiSaver HomeStart grant gives couples access to up to $20,000 and individuals up to $10,000 to help build their first home. This grant can be used to purchase the section you intend to build on before construction starts. Your KiwiSaver can then be used to help finance the deposit required by your home loan lender.
In order to qualify for the HomeStart Grant, firstly, you will need to provide a clear and final evaluation of the property. Outlining exactly how much it is worth and how you intend to finance it. Secondly, you must be intending on residing in the house for a minimum of 6 months after construction is completed.
Using a combination of your KiwiSaver, the HomeStart Grant and private lenders will allow first home buyers to build the first home they desire.There are multiple conditions so give us a call to check that you are eligible for the full amount.
If you are interested in building your first home, there are a number of options available to make this dream reality. Whether you need help dipping into your KiwiSaver, help to apply for the HomeStart Grant or need guidance on which lender to pick, our friendly and experienced advisers would love to help. Contact us today for free advice.
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