Key Insights
- Learn about terms like Elevation, Guarantor, House & Land Packages, Lenders Mortgage Insurance, and more.
- Understand the difference between BrickHybrid, Steel framed and Double brick.
So you’re thinking of building your first home (woop woop!). Well, there might be some terminology and building jargon that you are not that familiar with. To help make the journey easier we have put together the below guide of some of the language you will no doubt hear in the process.
Borrowing Capacity
The amount of money banks or lenders are willing to allow you to borrow. They’ll take into account factors such as your earning potential, your household spending, your savings, credit history, debts, dependents, and whether you’re buying solo or in a couple.
BrickHybrid
aka. Brick veneer. This method of building is a relatively new. An epic combination of brickwork (on the outside) and steel frames made from TRUECORE® steel (on the inside). With plasterboard and insulation added to the mix, the BrickHybrid method provides great thermal efficiencies, keeping you warmer in the winter and cooler in WA’s sweltering summers.
Double Brick
This is a building method where external walls consist of 2 layers of brick with a small gap between. This is the traditional method of building homes in WA. This method holds decent acoustic properties but lacks in thermal efficiency when compared to BrickHybrid or Fully Framed.
Elevation
A 2-dimensional drawing or render of the façade of a home. Elevation drawings can also be developed to show the back or side-views of the home. Most of the time when we are talking about the home elevation we are talking about the front of the home 🏠
Guarantor
A guarantor is a financial term to describe an individual who promises to pay a borrower’s debt in the event that the borrower defaults on their loan obligation. Guarantors pledge their own assets as collateral against the loan. For example, a family member can use their own property as security against your home loan.
House & Land Packages
This is where a home builder – like us! – bundles land and a home design to match in one package deal. You often get a choice of several home designs and several locations of land – and you just pick and choose the one best suited to your needs and lifestyle. It certainly takes the legwork and stress out of getting into your first home.
Check out our exclusive house & land packages
Land Titles
Land comes with a document called a Title. Titles are legal documents issued by the Government, which show all the details of that plot of land as well as the current owner/s name. Sometimes lots in new estates haven’t had Titles issued so you’ll need to wait for that before you can build.
Lenders Mortgage Insurance (LMI)
Lenders’ Mortgage Insurance, or LMI, is insurance that protects the lender if you default on your loan repayments. It only applies if you borrow more than 80% of your home’s value. Borrowing over 80% does happen a lot with first home buyers. If you want to avoid LMI, you can save for a larger deposit so that you borrow less than 80% of the house value, include a guarantor on your loan, or apply for a Keystart loan which is free from LMI. The actual amount of LMI that you’ll pay depends on the LVR, the lender’s rates and other factors about the property being purchased. LMI can end up being several thousand dollars so if it’s possible to avoid, that’s the best case.
Lockup
This is a stage in your building process in which the building site can be locked up from the outside, this typically happens when all the windows and doors have been installed (not necessarily the garage door). Getting to lockup sooner is better as it prevents the theft of building materials fittings and fixtures as they can all be stored inside the house.
LVR
LVR stands for ‘loan to value ratio’. It’s just one of the calculations lenders will use when they’re working out how much they will loan you and how much deposit you’ll need. They divide the amount you want to borrow by the value of the house you want to buy. The answer is your LVR and it’s expressed as a percentage. The absolute maximum LVR that any of the banks will consider is 95%.
Mortgage Protection Insurance
Or Home Loan Protection Insurance, is an optional insurance cover designed to protect you, the borrower and one very important asset, your home. This insurance will help you to meet your loan obligations in the case of serious or terminal illness, involuntary unemployment or death.
See our finance guide for more tips on finance.
PCI (Practical Completion Inspection)
This is a scheduled meeting you have with your construction supervisor from the builder at the building site to inspect the homes finish, fixtures and overall function to make sure everything is as it should be. Usually the construction supervisor will pick up a couple minor things and over the coming weeks rectify the issues. Once these issues have been rectified the home is finally ready for handover.
Visit our building process page for more.
Pre-approval
Pre-approval is a lender providing you with indicative approval of the maximum they are willing to lend you for a home loan, subject to certain conditions. It is still subject to final approval (this is called formal approval – funny that!).
Prestart
One of the most exciting steps in the building process. Pre-start is the meeting where you decide on the finishing details of your home, such as taps, garage door colour, door handles and locks, everything down to where you light switches will be. Our prestart meetings are held at the Style Studio with your Client Administrator, where you can touch and feel the fixtures before making your final decision – all in one convenient space. We also have the @Home Portal which includes all of these elements so you can get started on your choices before your meeting.
Stamp Duty
Stamp duty, or transfer duty, is a tax that applies to all property and land purchases or transfers. As a first homebuyer though, you get a little extra help from the WA Government known as first home owner rate (FHOR).
Steel Framed
Commonly used on the East Coast, this method contains a steel frame with insulation in-between, Primeline cladding on the outside and plasterboard on the inside. This method is fairly energy efficient and has good acoustic properties.
Find out more about our construction methods.
