oh and building houses often blows out time wise. Our PPOR was 12mth past when we were originally told. And our IP was supposed to be completed in Feb 2010, but they have only gotten around to starting it in the last month, for various reasons. Hopefully it will be completed by christmas (although I won't be upset if it is January as that is a much better time to try and rent it out for a premium).
Thanks for the tips girls, Lime will definetly look into what you've said. fingers crossed, i reallllllllllly want something in the works asap. moving sucks as it is, but when ur monsterously pregnant...even less fun!
We changed our mortgage repayments to interest only while we built our current house and then kept it that way while we were trying to sell it. Meant that things were a bit tight money wise for a few months, but it was a lot easier to deal with overall.
We had different lenders for the 2 mortgages though. That was just the way it was set up through our broker
There are some builders that don't require progress payments, but not sure if that style of house suits you. I'll PM you the one I know of if you like
We sold our first house and rented while we built this house, so slightly different scenario. It was hard toward the end, especially when the loan was 85% drawn over the Christmas break period (grrrrr!) but we managed to knuckle down and save heaps before the first progress payment was needed and that kind of kept us above water. The excitement of the new house actually made us determined to stick to a really strict budget (and have no life lol) for the 8 months while we built. If you can do without, it will be worth it!
I have done it, and we went on to keep our other property as a rental, but have almost officially sold it now (waiting for the money to hit my account in 2 weeks time )
The timing sucked construction started a LOT later then it was supposed to and they poured the footings when I was still in hospital with DD after she arrived. So it put a huge amount of stress as I wasn't working for as long as we had planned and it really threw a spanner in the works. But we got there in the end.
I would do what you can to reduce as much of your outgoings as possible, you should be able to pay interest only on the construction loan while building, and see if there are any changes you can make to your current mortgage to make it easier. Best to go in and have a chat to your home loan manager or bank manager, they can really help out, and best to do it upfront rather then when things get tight or tricky.
Remember too that your bank will release the money to the builders in 3 stages - so you wont be on full repayments until the final handover.
Land, slab and final completetion, and you only mke repayments (and interest) on what the bank has already laid out.
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