Home Building Guide

Stage 1: Is building right for you?

Stress levels

Buying any home brings with it a measure of stress (and excitement) – but building can emphasise these feelings even more so. I always say that a real estate transaction should give you those butterfly feelings in your stomach – BUT – if it feels like it’s making you feel sick in your stomach then it’s probably worth reassessing. So if you’re really looking for the stress free way to get into a home – building probably isn’t it.

The details

Secondly, how detail oriented are you? You’re going to need to not only have a great eye for detail in terms of picking things up as you go along this process, choosing your fixures and fittings and also a decent amount of vision to see the finished product before you get there.

Time frames

Building is slow. Most time frames blow out in one area and if you’re the type to get easily frustrated or you have a finite time you need to be in a place, building may not be for you.

Cost blowouts

The sad truth about building is that there are often cost blowouts. Now most banks will want you to have a fixed price building quote which will help minimise this – but changes along the way (variations), extra engineering issues and a whole manner of other things can see you out of pocket.

What’s not included

The bank will not fund all the costs associated with your build and as such you’ll need to have extra funds set aside to contribute some funds yourself. Here’s a rough estimate of things that may not be included and will need to be funded by you on top of any deposit required by the bank:

Before you build

  1. An initial deposit your builder or architect needs to look over the project and/or quote
  2. The cost of having your plans drawn up
  3. Council approval fees, engineering fees, quantity surveyor / building surveyor fees and other costs in terms of getting your land ready (ie: blasting rocks can be very costly, as can gravel fill for winter/wet weather builds on steep driveways)
  4. Soil test costs.
  • Tip – get estimates of these from your builder at the first meeting. If you are NOT intending on building straight away – still talk to a builder first up, it is no fun owning a block of land you can’t build on. 

And remember – DO NOT sign a contract for land or your building contract without it being subject to finance and having a solicitor review it for you (you’ll hear us say this a fair bit – it’s important!)

During your build

Any variations you make to your plans / quote after the bank has funded it will not be paid for by the bank and will need to be paid for by yourselves.  

After your build

Then it’s important to try and figure out what is NOT included in your build quote that you will need to fund after your build is done, examples of this can be things like:

  • Curtains, blinds, drapes
  • Driveways
  • Fencing
  • Landscaping
  • Additional fixtures or fittings you may want (and bear in mind some of these are better to get prior to your plaster going on – great tip from a client of ours)

These can be expensive, so if you don’t have the budget for them, now’s the time to think about how you’re going to afford them (because Mr and Mrs Jones across the street have let us know they want you to have curtains in your bedroom!)

One of our clients (after their build) said: We regret not informing ourselves more around the cost of landscaping and fencing. We have 4 large fences that all need concrete plinths. It’s about $9,000 in fencing our share.

Another client gave this tip: ‘Landscaping is more expensive than you think! It’s easily forgotten but can make the process of settling in etc drag out if it’s left un-done.’ Their landscaping was completed in the 6-12 months after they moved in.

Owner builders

Want to build your own home? Owner builder homes these days are done by very very few banks and you must have equity or cash such that you only want to borrow 60% of the build’s valuation. Owner builds are not welcomed by many banks and as such are very difficult to finance. Applicants who are licensed builders are seen more favourably by some lenders, but the choices are still very limited. If you’re interested in building your own home, please stop and speak to your broker now.

Importantly this relates to ANYTHING you want to do on your build – ie, if you’re a qualified electrician who wants to do their own work or to do your own painting etc. This can massively complicate things, please speak to your broker first.

Kit Homes

If you want to build a kit home, one way to go about funding it is to have equity or savings so that you can purchase the kit up front and then a fixed price building quote must be submitted by the builder who is going to erect it for you. Alternatively there are some kit home providers who will (usually for a cost) do a standard building contract payment where that mirrors a standard build contract. Note some lenders will not fund kit homes. Check out this video on Kit Homes that Kirsty has recorded.

Tiny Homes/Sheds

Bank’s don’t love to fund tiny homes / sheds you can live in / demountables / yerts etc. They’re looking at risk if they need to sell the property and the risk is you never put anything else on the property and have issues selling it later on down the track or that you remove the dwelling which is possible with these types. Typically speaking if you want to do something like this and don’t have equity in other properties you’re looking at funding the land through a bank (usually a bank that won’t place restrictions on when you need to build) and then doing this portion with cash.

You’d also need to show you could continue renting / paying nominal rent somewhere else as the banks won’t care if you’re going to put a tiny home on it yourself.

The issue with building a shed first (which used to be very common):

– a financing it (banks aren’t keen to fund just sheds even if they’re liveable as they know how often people end up with just a shed and no house).

– valuations with just a shed are not easy as there is a lack of comparable sales (valuers compare like with like – ie 3 bedroom houses, against other 3 bedroom houses in a near area).

– if you go to sell the block or need to borrow against it in future most lenders will use the value of the land without the shed meaning you can have issues with equity.

House and land packages

If you’re doing a house and land package have a read of this article.

Homes mid-completion

If you’re extensively renovating a home do not be tempted to start the process before you seek finance. Almost every lender in Australia is not keen to accept your property as security if you’ve already partially built or gutted it. It is much more advisable to seek your finances prior to commencing.

First home builder’s boost / First home buyer’s grants

Now is the time to check your eligibility (carefully!) for any government assistance in this form. Note appropriate time frames and cash benefit and if there are deadlines looming do not leave anything to the last minute as the process of building often runs longer than you are told it will or your own conservative estimates.

Note that the first home builder’s boost or grant is paid to the lender (typically) and released at the base / slab stage after the valuation inspection is done.

And in summary:

Please don’t think of this as me trying to talk you out of building, more just to prepare you for what’s to come! It’s a big process and one we love to help with, but our job is as much to educate you on what’s to come as it is to help make it happen!

And just to show you that it can all be so worth it, here’s what our client Jane has to say: ‘Building rocks because you (mostly) get what you want without compromise. The hard work is worth the end result every time.’

Here’s what Cynthia had to say about her experience building a gorgeous waterfront architecturally designed home:‘Here’s what we wish we had been told before starting! Go see Kirsty first rather than trying to get any financing yourself!!! Working with Up Loans made things much easier due to the responsiveness, professionalism and openness of Kirsty. ‘

Also, here is a first hand account from one of our clients on her build experience. Click this link to watch on Youtube.

Now remember, you can zoom ahead to the other stages or backwards as you need to make this process move at your pace:

Stage 1: Is building right for you?

Stage 2: Buying your block of land

Stage 3: Planning your build

Stage 4: Getting your fixed price building quote and your valuation

Stage 5: Approval for your home loan and progress payments

If you have any questions along the way, please just yell out! I’m here to help and as I always say, there’s no silly questions!

Happy thinking!


‘Kirsty has been amazing during the process of organizing finance to build our first home. She has stepped us through each stage and gone over and above to answer our many questions. The communication from Up Loans has been a stand out with constant updates and advice and both Carrie and Kirsty have met with us on several occasions outside of normal business hours which has been so appreciated. They have really made the whole process as convenient and straight forward as possible. We would be more than happy to recommend Up Loans!’

Kyra and Maurice

Some of our clients favourite spaces in their newly built homes that we have helped them to finance.