A guide to getting your finances in order before building

THE banks may have tightened lending conditions, but it’s not all doom and gloom if you are seeking finance to build your own home.

Since the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry was established in 2017, the financial landscape across Australia has changed.

A mixture of Australia’s property boom pushing house prices up and the banks new lending conditions as a result of the Royal Commission has made it harder for many to own a home compared to previous years.

However, in the Geelong region, the property outlook is promising with latest figures showing an increase of 7.2 percent of new dwelling approvals since October 2017.

There were 2,929 new dwelling permits issued by the council in 2017/2018, an increase of 10.6 per cent compared to the previous financial year.

The final report from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry has also recommended mortgage brokers must act in the best interests of the borrower.

It has also recommended, “The borrower, not the lender, should pay the mortgage broker a fee for acting in connection with home lending.”

Both recommendations, if introduced, could provide further confidence to borrowers that they’ll be better placed to buy a home that suits their financial circumstances.

Geelong Homes General Manager Andrew Carroll says that both the recommendations, as well as the tougher lending conditions can only be seen as a good thing when it comes to reducing financial pressure on first home buyers.

He says despite experiencing a short period of low inquiries in response to the tightening of lending conditions, Geelong Homes has found that people have begun to refocus their attention on what the banks require to make their building dreams a reality.

“Inquiries have picked back up because everyone has their ducks in line but in a different way,” Mr Carrol said.

“For some clients who really can’t afford a house, it’s not a bad thing, it elongates the process and it allows them to spend more time saving.

“But you know what? I’d rather that ethically any day of the week than to build a house for a client that they can’t afford, no one wants to put a family in financial hardship for a house.”

Geelong Homes also has a list of trusted mortgage brokers on hand to help potential clients seeking finance.

Want to learn more? Visit any of Geelong Homes’ displays located in Lara, Armstrong Creek and Ocean Grove.