The Home Builder Special
By Tom Warner
A builder, mortgage broker and an accountant walk into a room. What do they talk about? Building a house, how to get finance for it and what stimulus measures are available of course. This month we have a special building grants newsletter, where we talk all things on building a new home, from the building process, what to be aware of when going for finance and what government stimulus packages or grants are out there right now.
The run-down on building grants – with Tom Warner from Lincolns
In the last couple of months, the government have made a number of building grants and stamp duty concessions available to people who are building or renovating homes. As a way to inject money into the economy in light of the COVID-19 pandemic, these grants can result in significant savings for people planning to build or renovate.
The building grants available can be split into two categories: those that are on offer from the Federal Government; and those on offer from the WA State Government.
The grants come with very specific rules, timeframes and eligibility criteria. The first thing you need to do is read our fact sheet to get detailed information on all of the grants available and to work out which one/s apply to you.
If you want to take advantage of these grants, my recommendation is to move quickly. Feeling overwhelmed working out which is the one for you? We have a good understanding of each of these grants, so if you need help interpreting all of the rules, we are here to help.
Advice from a builder - with Nigel Ryde, Owner of Ryde Building Company
For this month’s special Home Builder newsletter, we caught up with Nigel Ryde from Ryde Building Company. Nigel gave us some tips, tricks and handy advice when looking at building a new home and, in particular, those looking at utilising the new grants available.
What advice can you give to people who are looking at building a new home?
Don’t rush into anything. Have a really good idea of what you want, how you would like to use various spaces in the house and have a written brief. Some suggestions I would make are things like:
· How many bedrooms?
· Do you want high ceilings in the kitchen and living areas?
· A separate office away from the main living area?
· How would you like the Ensuite to flow etc?
From this, we can design the initial layout for you and the start the fine-tuning process.
I would also suggest people consider the resale value of what they are building. Build for comfort not for prestige.
With new grants being announced, how would you suggest clients use these funds?
The best advice I could give is to make good use of the grant funds. Don’t count on them, but rather consider the funds a bonus that could be used to pay down your loan (and save you thousands of dollars) or to do little finishing touches that aren’t vital. The worst thing I could think happening is someone counting on those grants coming in and then not being eligible due to a technicality.
The new grants have some short timeframes to get signed up and foundations laid. What recommendations would you give to people when thinking of building or buying land?
Be pre-approved for finance for the build, that way you have an idea of your budget. If you are buying newly developed land, make sure that the titles have been issued or have dealings ready to go. This process can take considerable time and with such a short window may cause unnecessary delays.
Any final tips you can give?
Make sure you get a fixed price contract for your build. This will give you the best chance of everything going according to your plan and budget.
How to be finance ready - with Robert Field, Mortgage Broker at McGregor Mortgages
With the banks rules and lending criteria constantly changing and every bank doing something a little different, we thought we would bring in Robert Field to get the run down on being finance ready.
Of the new grants and payments being announced can any of these be counted towards your deposit when borrowing?
Currently the only grant that a lender will count towards your deposit is the First Home Owner Grant?. All other grants that have been announced are currently not counted as part of the deposit by the banks. There are discussions going on right now that potentially the Federal Home Builder Grant will be able to be counted also but this is for each state authority to decide.
How can you be best prepared when looking at approaching a bank for a home loan?
You must have a minimum 5% deposit for the mainstream lenders and 1% for Keystart plus the funds to cover costs such as stamp duty, settlement fees and borrowing costs. The banks will also request all of the following and you can make it easier by bringing all of these along:
- Payslips for all applicants for 2 pay periods
- Bank statements for 2–3 months depending on lender
- Details on all your existing liabilities, including monthly repayments and credit card limits
- Any payday lending such as AfterPay or ZipPay
- Current balances of any HELP or HECS debts
- A monthly summary of your living costs broken into categories
The lender will also scrutinise your declared monthly living costs back to your supplied bank statements to confirm that you haven’t missed or understated any amounts.
What are some things that people tend to forget or overlook?
Entertainment, holiday and subscription costs in their monthly living costs. People tend to underestimate their takeaway and entertainment because it’s a little amount here and a little amount there. When you add it up it can surprise some people.
What tips can you give right now with the current lending environment?
Lenders are processing preapprovals at a very slow rate currently, due to the volume of other loan applications they are receiving. Some lenders have even stopped giving preapprovals for home loans. Another thing to be aware of is that if you had taken super out under the COVID-19 early access rules, you cannot count these funds towards your deposit or contribution to the build. If you are receiving Job Keeper payments the lenders will only count your income from gainful employment not the top up amounts.
If you need any assistance navigating your way through the home building grants process, call us on 9841 1200.
A new billing system … coming very soon
We are committed to finding innovative ways to improve the way we do business with you.
In the next few weeks, you will notice changes in the way we communicate with you about your invoices and it will be even easier for you to settle your account.
This change has been made after listening to our clients’ feedback and is part of our ongoing development to enhance our billing systems and procedures.
A Coffee With… Janet McArtney
We recently sat down with Janet McArtney from Soroptimist International of Albany Inc, an inspiring group of women dedicated to supporting women and children particularly in local causes.
If you are in the Great Southern, you may have of heard of their incredible drive for Albany Women’s Centre Kare Kits, designed to help women and children escaping family and domestic violence, made available when they arrive at the refuge.
