Self managed build
So a self managed build is that you as the home owner organise all the tradies; the builder, the plumber, the electrician, the roofers, the painters, everyone individually to come and build your new house for you. Now although you can, at times, save money in those kind of situations but going around and finding the best deal and demanding certain products etc, if you don’t have previous experience in construction or project management and you haven’t got everything lined up and ready to go, we often see large over runs in these types of builds (ever seen an episode of Grand Designs??).
The banks are generally happy to lend for this sort of thing if you’ve got a good sized deposit (40% plus) AND if you’ve got experience in the industry.
If a self managed build is something you maybe considering, have a think about what’s the best use of your time and your experience. Maybe working in your existing job more and earning more to pay the additional costs to get an experienced project manager in might be a better use of your time and energy.
If you want to chat through your project and see if the banks would be happy to lend you money for your self managed project, give us a call and we'd be happy to chat about that.
Kitset Builds
Kitset Homes are becoming more common where building companies who have plans, framing, roofing and pretty much everything you need to build a house will sell you everything you need.
You get the foundation poured to their specifications and then the frames all turn up and step by step, everything you need to line the house and fit it out with arrive on site. You need to arrange a few of the trades to come, the plumbers to connect everything, the electrician to wire the house that sort of thing.
It's really important to identify what is and isn't included with a kit set build as it can seem pretty simple and cheap to do but sometimes the reality is a little different.
Again, very similar to an owner managed build, if you have experience in project management and building and that can be a really good option for you. Again need a good sized deposit and also need that experience in the industry.
What loan to value ratio can these types of builds be done on?
The banks will generally lend up to on 80% of the value of the land but they wont lend any more until the kit set or relocatable is on site and connected to services (you need to ensure that you have funds to be able to fund everything needed to get to this point).
The bank will then lend up to 50% or 70% of the final value of the project once it is connected to services and a valuation is provided. Generally they will release funds on progress payment valuation reports or builders invoices that are well planned out in advance.
For all of your construction lending needs, the team at My Mortgage are here to help. Greg, Claire and Adam have all built houses of their own doing fixed price builds and can help walk you through the process of getting finance sorted for your build.