We will organise an appropriate loan that will include progress payments via the chosen lender after each stage of building has been inspected and verified. This guide assists with important things you need to know about before seeking finance for construction, extending or renovation.

Choosing a Builder

When selecting a builder, you need to ensure the builder:

• Is registered and licensed.
• Is financially sound and has insurance.
• Provides you with a detailed written quotation clearly showing you what is included or excluded in the price. Written quotes allow you to compare quotes more easily and it is wise to get three quotes before deciding on a builder.
• Shows you references from satisfied customers.

For help finding a builder, contact the Housing Industry Association (HIA) or the Master Builders Association.

Before you start

When you are building, extending or renovating organising finance is a complex task as the lender must be able to determine the final value of your property. When arranging a valuation, the lender will require the following from you:

• If you are building or renovating as an owner builder – A fully completed “Owner Builder Estimate of Construction Costs”. You can obtain a copy of this from Clarity.
• OR 1b. If you are using a contract builder – Tenders and quotes from your builder.

PLUS

• Your written schedule of progress payments. This schedule should show how much money you will need as you build, and when. It should also detail the works you intend completing at each stage. This will assist the valuer in assessing the projected cash flow. The lender will review this schedule, with the progress payments subject to negotiation.
• Council approved plans and specifications, along with any conditions of approval specified by the local council.
• Written details of the work to be carried out. This should include all trades such as plumbing, electrical work, bricklaying, carpentry, roof tiling, wall and floor tiling, gas fitting, painting and concreting. Make sure your highlight the works to be carried out at no cost, and detail any works to be completed at a discounted rate by you, your family or friends. You will also need to supply a complete costing of the works to be subcontracted to qualified tradesmen. (Please provide copies of written quotes)

If you are building, extending or renovating the property yourself, the lender also requires:

• Written details of where you intend to purchase the building materials, the credit terms available and copies of any trade labour cost quotes already arranged.
• Evidence of your savings required to fund construction to the stage when the lender will release the loan funds. Avoid payments in full until you are satisfied the job is complete. If the work is shoddy or hasn’t been completed, you may have trouble getting your money back.

QUESTIONS YOU SHOULD BE ASKING

• Am I prepared for building delays?
• Do I have enough funds if building costs blow out?
• Is my loan suitable for building?
• Have I budgeted for fixtures and fittings?
• Do I know exactly what my builder is quoting for?

Choosing a design

Once you have found the builder or architect you would like to design and carry out your renovations, you should contact your local council office to find out more.

Consider these points when choosing a design

• The lands zoning and what types of constructions or improvements can be built there.
• Any building restrictions that may apply.
• Any factors that will affect your overall building costs, such as bedrock that may need to be cleared, the soil type and the slope of the land that will affect drainage requirements.
• Any council-planned developments.

If you are considering building on land in an area which is not already built up, it is also important to find out the following before you purchase:

• If the land is subject to flooding.
• If you will need to erect fences.
• If the new subdivisions has sealed roads, kerbs, utility connections (for example, gas, electricity, town water, telephone) and drainage.

The information will then help you choose the final design – like a kit home, a display home, or an architect designed home.

Do you need an architect?

Architects and draftsmen can help determine the home design that best suits your land, your needs and your budget.