Contact New Build Plan

• Q: I have a 5% deposit which I can prove is saved, but I need more deposit, can I still apply?

  A: Current credit criteria requires you to have a total of 10% deposit if you finance directly with a NewBuild advisor. But if you have 5% of genuinely saved funds, the remaining deposit may come from a gift, personal or family loan or other source, as long as that is disclosed on your loan application.

• Q: Can I only partially finish the home?

  A: The simple answer is no. The value in your home comes in the completing of your home. The bank also wants to see a Code Compliane Certificate, AND a valuers Completion Certificate, so if you do not complete your home fully, you are likely to run in to difficulties with your bank. If you have some items you want to complete yourself, that’s normally allowable (see Owners Care).

• Q: How do I know when my home is completed to satisfy my bank loan condition?

  A: Your bank needs a Code Compliance Certificate and a valuers Completion Certificate as conditions of the loan. You need to make sure you have sufficient funds to fully complete your home to these standards, and your builder must be made aware that final payment to them may depend on your completion.

• Q: What if I want to build a kitset home or relocatable home?

  A: These are really hard to finance because the supplier/provider wants full payment before delivery, and banks pay only on secuirty in place. So unless you have a very large deposit to pay the large, upfront payments required, these types of homes are harder to finance.

• Q: What if I want to fix part of my construction loan?

  A: You can fix your section loan and leave it outside your construction loan. If you do this, you must make mortgage repayments on this portion of the loan. You may also split your construction loan and fix the drawn portion during the build under certain cirumstances. If the interest rates are moving upwards and you want to protect your rate, it may be possible to fix a portion of your construction loan.

• Q: Do I have to capitalise interest (have the interest costs built in to the loan)?

  A: Most elect to have the convenience of capitalising interest through the build, but if you have sufficient deposit and can service your current rent and the construction loan, you may elect to pay the interest as you go. Many feel that compounding interest until completion is expensive, but you are only compounding the unpaid interest. It usually adds several hundred dollars over the life of your construction loan.

• Q: Do I always need a Third Party Guarantee?

  A: You should always seek the added protection of a third party guarantee offered by Registered Master Builders or Certified Builders. In most cases there is no additional cost to you. If your total deposit exceeds 20% (80% LVR or lower) over the total cost, then a third party guarantee is not mandatory. If you have less than 20% deposit, you need the "Premium" guarantee offered by Master Builders, or the "Built-in" guarantee offered by Certified Builders

• Q: I already own the section and have already spent money on improvements (such as driveway, water tanks etc). Can I use this as equity?

  A: Most banks will not count any improvement value to your section towards your deposit. Newbuild will, as long as that value reflects in the valuation. You may not be credited your actual costs, so you do run the risk of getting less credit towards your deposit than you may have by including these items within your build.

• Q: I hear that building can be frustrating and risky. Should I really consider building?

  A: Building can have huge personal and financial rewards, but yes, you do need to make sure you minimise the risks involved with building. Mistakes are likely to happen during your build. It’s the nature of putting so many pieces together; so many suppliers and contractors. But minimizing risk is also about communication; how your builder listens to you and works through the entire process until you are satisfied. Make sure you have good communication with your builder and your frustrations will be reduced.