Building a new home is a complex project and there are many decisions to be made before the project even begins. From the style of architecture, to the floor plan and layout; bathroom and kitchen fixtures and fittings; right through to flooring, paint, countertops and cupboard handles. But the most important – and usually the first – decision that needs to be made when building a new home is who to go for financing. Should you use your builder’s broker or work with your own broker?
Builder’s Broker vs. Your Own Broker
When it comes to securing finance for a new home build, some builders will recommend their own broker, someone they’ve already developed a working relationship with. And while many people believe they’re bound to work with their builder’s broker when building a new home, that’s not actually the case.
For most builders, referring their own broker provides them with an extra level of assurance, that they’re not wasting time on a home buyer who may not qualify for finance. However, for some builders, the referral could involve some form of compensation like a referral fee or a “kick-back”, which inevitably ends up costing the home buyer.
As a new home buyer, you’re not required to work with the broker that your builder suggests. In fact, we always recommend you shop around for the best finance deal to suit your requirements, and find a mortgage broker who you feel comfortable working with.
So, before going ahead with your builder’s broker, decide if the broker really is working in your best interests, both now and for your future financial goals, by doing your own research and not relying solely on your builder’s recommendation.
By working with an independent mortgage broker – someone who acts on your behalf with your best interests at heart - you’ll be set up for success when building a new home or buying an existing home. And you won’t be covering the added cost of any kick-backs or referral fees!
Securing Finance for Your New Build
Securing finance for a new build is a little different than if you were buying an existing home. Construction loans are structured differently and involve a series of progressive drawdowns or instalment payments to your builder, rather than an outright payment from your lender.
As this type of lending can be complex, it’s best to talk through your financial options with someone who understands the complexities and can guide you through the processes involved in applying for a construction loan.
Find out if a construction loan is right for you by talking to a Mortgage Express mortgage broker today.
While all care has been taken in the preparation of this publication, no warranty is given as to the accuracy of the information and no responsibility is taken by Finservice Pty Ltd (Mortgage Express) for any errors or omissions. This publication does not constitute personalised financial advice. It may not be relevant to individual circumstances. Nothing in this publication is, or should be taken as, an offer, invitation, or recommendation to buy, sell, or retain any investment in or make any deposit with any person. You should seek professional advice before taking any action in relation to the matters dealt within this publication. A Disclosure Statement is available on request and free of charge.
Finservice Pty Ltd (Mortgage Express) is authorised as a corporate credit representative (Corporate Credit Representative Number 397386) to engage in credit activities on behalf of BLSSA Pty Ltd (Australian Credit Licence number 391237) ACN 123 600 000 | Full member of MFAA | Member of Australian Financial Complaints Authority (AFCA) | Member of Choice Aggregation Services.