If I new all the things that could come up as you entered into building a new home, I'de be a more wise owl that's for sure.
It's not only the Deposit you have to worry about to make Mr bank happy to speak to you, it's also the extra you need to cover for the LMI (Lenders Mortgage Insurance) this on its own can be 10-20k on-top of your deposit. Then you have to consider the extra deposit you need to give to the builder to start the quote process on the house (3-5k here), and let's not forget the holding deposit for the land. (1k for me)
Once this is all covered off, you then need to have a few thousand spare for the Conveyancer, set a little aside for unknowns like a deposit for Building and Landscaping if your building in a community estate, this is an additional 3.5k on it's own where we are building (GASP) (this sits in a trust to ensure we finish the Landscaping). On-top of all this, ensure you have a little piggy bank of a few thousand set aside in the event the Site cost's blow out due to un-for-seen things like Big Rocks while digging and clearing your block.
I guess this isn't just about me, it's really a brain-dump for other people heading into this themselves. It's not just about the 5%, 10%, 20% Deposit, there is Sooooooo Much more to consider and save before you enter into this.
So far we are managing it well, but seriously, Where's the little hand-out in life to pre-warn you.
O and PS...... Wait till you head into the Colour and Electrical meetings, make sure that Conditional loan has a buffer in it to be able to get some cool changes done before you lock in with the bank! Can easily spend another 10-60k here without blinking an eye.
Hi there J&A,
ReplyDeleteGreat blog and I definitely feel your pain with the deposit and unknown costs! We thought we had it under control with a good 15% deposit plus our first home owners grant as an extra. It was all good until bank valuations. LMI is based on what you are borrowing over the valuation amount, plus you have to add the LMI fee on top. Ours came in 31,000 under on valuation and we had to do a huge shuffle of funds at the last minute. Wish someone would have explained the process better, but its all good once it's sorted out :D
Hey there,
ReplyDeleteYes the valuation is the 1 I'm watching out for, especially due to the LMI we have as well. I guess at this stage I'm at the mercy of wait and see.