There’s a lot to weigh up when it comes to deciding if you’ll buy or build your first home. So which one is best for you? We’ve put together some points for you to consider.
What are the pros of building a house?
If you’re eligible for the first home grant, you could receive get up to $10,000 to purchase a new build. Generally, new builds are exempt from LVR restrictions so you may also be able to purchase with a lower deposit.
With a new build, everything is brand new so you’ll likely have little to no maintenance for a while, especially if you have a 10-year builder’s guarantee. Depending on the kind of build you’re going for, you can not only design the layout in whatever way you like, but you can also choose the colours and features that work for you.
Finally, once your build is complete, it’s possible that it can be worth more than what you initially paid, creating instant equity for you.
What are the cons of building a house?
Building a house can be a stressful process, delays and dealing with contractors are a few of the reasons that put people off the most. Finding a good location can be difficult – there may be restrictions around the size of your build and the area amenities.
Lower cost builds also don’t tend to have as much room for design adjustments. Although it may be less expensive, you could end up paying more if you want to tailor it to your needs.
There can be different lending conditions for new builds, so make sure you choose the right payment option to give your bank or lender more certainty about how much you need to borrow.
What are the pros of buying an existing house?
There is often more room to negotiate if the owners need to sell quickly or parts of the house need repairing. Choosing an existing house means you’ll have more location options and can choose if you’d like to be near the city or further out.
Your bank or lender can also easily see the value of the home so it may be easier to sort out your mortgage. Plus, getting a builders report means you can highlight any area of concern and know what you’re getting into financially.
What are the cons of buying an existing house?
If any work needs to be done on the existing home, you’ll be the one bearing the costs. Renovations can be very expensive, so you may be better off with a new build in the long run.
The housing market can be very competitive, so it could take a while to find your dream home. Because LVR restrictions usually apply to most existing homes, you’ll also likely need a solid 20% deposit to secure the home.
Not sure which route is best for you? Get in touch with our friendly mortgage team and they can help you determine what’s best for you and your situation.