At first glance, the process for building a home can seem daunting. And rightly so! With several stages and points of contact (your land developer, builder, mortgage broker – just to name a few) it’s easy to quickly become overwhelmed, especially if it’s your first time building a home.
To help instil a sense of confidence, we’ve compiled a list of some key terms so you can be better prepared when it comes to building your new home.
In construction, a batter is a term used to describe the transition between two different levels of ground. This batter is usually angled at a minimum of 45 degrees.
A set of national requirements for the use in the design, construction, alteration or demolition of buildings, the setting out of procedures, acceptable methods or material, and the minimum or maximum values. Each state has its own variations to the national document.
An area on your block designated by the Developer and/or Council who is responsible for clarifying if you can build outside this space.
A clearance to the surrounds of the home to provide a flat clear pathway for trades/equipment during the build.
A lowered portion of a ceiling that’s usually used as a decorative feature or to hide a beam.
Contours are lines that nominate the levels of your block. A feature survey is conducted by a surveyor who’ll confirm the levels of your block that will form the base of your site plan. The contours are shown as lines across the block and are required to determine the height of your home.
The access point from the street to the block; for example, where a driveway is placed.
A method often used to provide a level area (see Building Platform) on a sloping site. A part of the sloping surface is cut away and used to provide fill on the portion of the slope immediately below it.
Approval by the relevant authority for part of a building to vary from planning requirements. Commonly required for wall heights near or on boundaries, and setbacks from boundaries.
The gradient of the driveway between the front boundary (see Crossover) and the garage floor. The maximum gradient is governed by the council to ensure suitable vehicular access.
An easement (sometimes known as a right of way) is a section of land that forms part of your block, and belongs to you, but someone else (water authority, council, etc) has the right to access it. As a builder, we cannot build on an easement as we’re required to keep this area clear.
A drawing of a structure that shows the front, side or rear of a façade; it is a first angle projection.
These are your final house plans, which show any changes made. Once you sign your final plans as acceptance, they become part of your contract.
A bird’s eye drawing of a home layout that provides detailed insights, placements, and measurements of each room.
The process of seeking Council approval for certain building works as set out by the Building Regulations.
A retaining wall is a piece of construction that is often found in places where extra support is needed to prevent the earth from moving downhill with erosion. The most basic function of a retaining wall is to battle gravity.
The distance (usually) from your house to the boundary. Can also be used for distances from your house to items such as pools and existing sheds.
A diagram representation of the shadowing effect on adjoining properties by the proposed new home.
The percentage of the site covered by the new home. Imposed to prevent buildings being out of scale (too big) with the surrounding neighbourhood and to ensure sufficient open space, play area and off-street parking.
Placement of the proposed home on the land. Prepared to comply with all planning, regulatory requirements, and developer guidelines.
This is the approval you need to build your new home. It means that your registered Building Surveyor has reviewed and approved your construction drawings, specifications, and engineering. This also means your home complies with relevant building codes and regulations.
Indicates the construction requirements for building within a medium threat bushfire-prone area.
An agreement that creates an obligation on the owner of a property not to do something. For example, a covenant could state that no more than one dwelling may be built on the land.
A person or entity who engages in the acquisition and development of land. It’s the responsibility of the Developer to prepare all relevant documentation to receive planning and development approvals from the local council. The developer will then market, sell and deliver the project in line with the approvals (such as including road and infrastructure works) to produce a vacant lot title which a builder can then commence construction of a home on.
Councils and developers can place restrictions on features such as home size and offsets from boundaries, right down to the materials and colours you can use on your façade. Once your plans are finalised, they need to be approved by the developer before you can start building.
These are rules and regulations that the developer places on your land, which outline limitations that must be met by the builder & homeowner (such as eave size, setbacks or set colours). Your New Homes Consultant will let you know what the rules are, so you can take this on board when selecting options for your new home.
A legal agreement between your builder and the owner (you!) detailing conditions relating to the construction of the home. This includes your final plans and pricing.
The amount of money payable by the owner to the builder for completion of Preliminary Works – otherwise known as an initial deposit.
An initial agreement describing items to be completed before the preparation of your New Home Contract. This is where you select options for your home so you can be sure of your final price, before paying a deposit.
A survey undertaken by a licensed surveyor to identify correct boundaries on a land allotment. This is especially important when building on the boundary.
The stage a new home contract reaches when all contractual requirements have been satisfied and the job can be handed over to the building team to begin construction.
An important test that is carried out before the footings are designed. By drilling a series of holes and analysing the contents, the condition of the soil can be gauged to enable an engineer to design the right foundations.
Your borrowing capacity or borrowing power is how much a lender will allow you to borrow to purchase a new home or block of land.
Comparison rates are designed to help you determine the true cost of a loan. The comparison rate is a rate that provides a better indication of the true cost of a loan by bundling the interest rate plus various fees into a single percentage figure. The formula that informs a comparison rate is regulated by the Consumer Credit Code and is uniformly calculated on a loan amount of $150,000 with a loan term of 25 years.
Your home loan application will move through several different stages before you get the green light from the bank/lender. At an early stage, you may receive ‘conditional approval’, which means the lender has conditionally approved your loan – in principle at least – if you meet certain additional requirements.
The extra information a lender may require with conditional approval can include recent pay slips, a valuation of the property you’re buying or a fully signed and dated contract of sale.
However, there is a whole variety of conditions a bank may impose before formally approving your home or investment loan. As a guide, some lenders won’t even consider your loan application until you’ve found the property you want to buy.
*All finance solutions provided by Resolve Financial Solutions Pty Ltd trading as Resolve Finance ABN 65 079 545 378, Australian Credit Licence No.385487.
Initial part payment of a contract price. A deposit will usually need to be paid on the purchase of land or when entering into a building contract.
Equity is the difference between the market value of the home and how much you owe on it.
Fixed rate home loans mean the interest rate you pay doesn’t change for a set period – usually 1 to 5 years.
Final payment for the completed home by the owner to the builder. This stage is reached when the final claim for completion has been paid. At this point, keys and warranty certificates to the home are handed to the owner.
When you borrow money to purchase a home, the lender will charge you a fee. This is known as ‘interest’, and it’s usually set at a percentage of the amount of money you have borrowed. An interest rate determines how much interest you will pay per repayment and is set by the lender. This is based on decisions by the Reserve Bank of Australia (RBA).
The RBA reviews the cash rate monthly and will increase, decrease or hold it based on their views of the Australian and international economy. A change to the cash rate will usually be reflected in a change to lender interest rates.
Lenders Mortgage Insurance (LMI) is a one-off, non-refundable, non-transferrable premium that’s added to your home loan. It’s calculated based on the size of your deposit and how much you borrow. The more you contribute to the purchase price of your property, the lower the cost will be.
LMI protects the bank against any loss they may incur if you are unable to repay your loan. You will need to pay LMI if you want to purchase a home without the 20 percent deposit required by most lenders.
Your loan is made up of two parts: the principal and the interest. You’ll make regular repayments which include both interest and a portion of the principal to ensure that your loan is repaid within the agreed loan term. Your monthly repayments will be based on your agreed loan term, e.g. 30 years.
If you’re paying an interest only loan, your monthly repayments will be exactly that – interest only for an agreed time, generally around 5 years.
Stamp duty (or land transfer duty) is a type of tax paid by a buyer when purchasing a residential property. The amount of stamp duty you’ll pay will vary depending on the value of the property, when it was purchased, and whether you’ll be living in it.
Formal approval is another name for ‘unconditional’ approval and is sometimes also known as ‘full approval’. These terms mean that the bank/lender has everything it needs to make a final decision, and they’re willing at this stage to lend you the money.
At this stage, you don’t have to accept the loan. However, if you’re happy to go ahead with the lender’s offer, all that remains is for you to read and sign the loan paperwork. Your local Resolve Broker can explain anything you don’t understand or you’re unsure about in the loan document.
‘Conditional’ and ‘Unconditional’ approvals don’t last indefinitely. They typically have a timeframe of three months but even then, nothing is set in stone prior to settlement. A lender can still pull out of the deal prior to settlement for a number of reasons such as fraud or error, or more likely, if they believe your financial situation has changed significantly since you first applied for a loan.
*All finance solutions provided by Resolve Financial Solutions Pty Ltd trading as Resolve Finance ABN 65 079 545 378, Australian Credit Licence No.385487.
The interest on a variable rate home loan may change over time (without notice) based on the lenders’ decision to pass on interest cuts or increases made by the Reserve Bank of Australia.
Estate amenities will have a big impact on your family’s lifestyle. Parks, schools, and retail amenities can take time to deliver so if these amenities are ‘proposed’ it’s always worth asking the developer for more information on the expected timing.
Also, consider if the estate has easy access to the freeway and public transport, as well as any privacy or noise concerns. Driving past the area at different times during the day will help you better understand each of these areas.
Land that has been allocated by a Developer for the exclusive packaging and sale by a partner builder. This is done to improve awareness of the house and land options available to customers and allows the Developer to control the quality of housing within a project. Exclusives are released to the market by the builder pre-packaged and include all site works, developer requirements & council costs associated with that block of land.
A service provided by the builder incorporating house, land and/or finance that is offered as a tailored project.
Payment by the purchaser to the vendor of the full purchase price less any deposit already paid. Transfer of ownership will be recorded on the Land Title following settlement.
When land is titled, it means that it is officially ready to begin the build process. At this stage, the land has been subdivided into individual blocks, and infrastructure such as roads, gas and power are in place.
Speak to one of our friendly New Homes Consultants to begin your home ownership journey today.
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