So, you have decided it’s time to own your first home? Congratulations! Now, are you going to build or buy? Continue reading to find out which option will suit you.
How much patience’s, do you have?
Although it can take time to find the perfect home, building can take a lot longer.
Once you have brought your already established home and have signed the conditional contract to the date of settlement, it can take as little as 30 days to move into your new home. If you decided to build, once you’ve found land and chosen your house plan on average it can take on average 7.5 months (in some cases a lot more) for the construction to be complete. With building, you also have to consider the waiting periods on counsel approvals.
Following on from patients, what are you prepared to do?
If you choose to buy an established home; would you be prepared to do reservations or a house that is perfect. Option one requires extra money and time and figuring out whether you will make the reservations before you move in or later down the track. Option two requires a lot more house hunting, and the perfect house can cost you.
With building, are you prepared for the waiting, the meetings, the planning etc.? as mentioned earlier building does take time.
Are you eligible for the First Time Home Owner Grant?
The 2018-2019 State Budget, Tasmanians are eligible for a First Home Owners Grant of $20,000, for first owners wishing to buy or build. (for more information go to https://www.sro.tas.gov.au/first-home-owner-grant) , would you prefer to put the grant towards your home loan deposit, or would you prefer to put that towards building your home?
Where do you want to live?
It is no shock to say that if you’re looking at building a house, vacant land in or close to the city is very minimal, and on the off chance there is some it can be costly; if you want to be close to the city, you would be better off buying an already established home. If you’re happy to live future out, then building could be a perfect option for you.
How much are you wheeling to pay?
According to Canstar, it is cheaper to build in Sydney, Melbourne and Adelaide and more cost-effective in Perth, Brisbane and Hobart to buy an existing home. Secondly, stamp duty; when you build, you are only required to pay stamp duty on the land. When you buy an existing home, you are required to pay for the land as well as the house. Construction loans have a higher interest rate, as payments are scheduled for each development stage of building. Standard home loans tend to have lower interest rates.
In conclusion, there are many pros and cons to both building and buying. But in saying this, it is all up to the person. If you are interested in finding out more on if building or buying will suit you more, call a broker at Derwent Finance on 03 6122 0338 or firstname.lastname@example.org