Recheck and Reforecast Your Build Costs
Recheck and Reforecast Your Build Costs
After finalising the architectural plans and selecting a builder for your new home build in New Zealand, an essential next step is to revisit your budget and reforecast the build cost. This process ensures that your project remains financially viable and that you have the necessary funds to complete your dream home without unexpected financial strain.
Rechecking Your Budget and Reforecasting Build Costs
The transition from planning to actual construction can often reveal discrepancies between initial estimates and the actual costs. Market fluctuations, changes in material costs, and modifications to the design can all impact the overall expense of your project. Therefore, reevaluating your budget at this stage is crucial for aligning your financial expectations with reality.
Gathering Updated Quotes and Costs
Start by compiling the most recent quotes from your builder and subcontractors, including costs for materials, labour, and any permits or fees that were not included in the initial estimates. This detailed information will form the basis of your revised financial plan.
Assessing Contingency Funds
It's wise to reassess your contingency fund, typically recommended to be at least 10-20% of the total project cost, to cover unforeseen expenses. The complexity of your build, the condition of your land, and other risk factors can influence the size of this safety net.
Reforecasting with Precision
Use the updated quotes and information to create a more accurate forecast of the build cost. Tools like construction cost calculators, available from financial institutions or building associations in New Zealand, can help in this process.
Checking Lending Capability
With a revised budget in hand, it's time to check your lending capability. This involves meeting with your bank or financial lender to discuss the revised project costs and ensuring that your loan or mortgage will cover the new forecast. It's also an opportunity to shop around for better rates or lending terms if your current arrangements are no longer competitive.
Securing Additional Funds if Necessary
If your reforecast indicates that additional funds are required, explore your options early. This might include extending your mortgage, seeking construction loans, or tapping into savings. Being proactive about securing additional funding will help keep your project on track.
Documenting Changes and Next Steps
Finally, document any changes to your budget and financial arrangements and communicate these to your project team. Keeping everyone informed helps ensure that your build progresses smoothly, with financial transparency and accountability at every stage.
Revisiting your budget and reforecasting build costs is more than just a financial exercise; it's a critical step in the journey toward creating your new home. It ensures that you're prepared for the road ahead, equipped with a realistic financial plan that aligns with your vision and your means.
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