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About Keystart

How variations work


Roisin Broderick, Content Specialist, Keystart

17 Jun 2021 • 2 mins 30 secs

If you're building a new home, you are probably on a steep learning curve! There's a lot to take in. You have been to the display homes and may have chosen your home design. At this point, your builder may let you know they will prepare a building contract for you to sign.

Before you sign

If you are applying for a loan with Keystart, we recommend you apply up to conditional approval before you sign any contracts.

Conditional approval means your finance will be approved if you meet the conditions provided to you – simple right! We'll also tell you how much you can borrow, very helpful to have on hand before you start talking about building contracts. 

One of our conditions, if you are building a new home, is to send us the final building contract once you have set that up with your builder. Your final construction loan amount will be based on the original building contract you sign.

Any changes or variations must be approved by Keystart

Building your own home is an exciting process. It may be tempting to change your mind about your house plans or materials. Any changes you make to the floor plan of your home or materials used can affect the overall cost of your build, sometimes significantly.

Keystart must be contacted if you consider making any changes to your building contract with your builder. We need to ensure the variations meet our minimum building requirements.

We also need to check that the variations don't increase your expenses or debts and that you have the financial capacity to manage your home loan repayments once they come into place.

Depending on the types of variation, we may need to do another valuation which means there will be another valuation fee.

You may need to fund these cost of the variations yourself immediately. 

What happens if increased building costs are passed on to you?

Some customers are facing price increases due to a rise in costs in the construction industry at the moment. This can be hard for builders to predict and may be passed on to customers as a variation to your building contract.

Unfortunately, you may need to cover the increased costs yourself if that happens. Keystart will already have assessed your maximum borrowing capacity, so you may not be able to borrow any more funds.

Keep in touch with your builder

Keeping open communication with your builder may help as they should be able to let you know of any possible scenarios. Be sure to ask lots of questions so you can make informed choices. 

Keeping to budget

If you can manage to avoid variations, you're sure to find the build process less stressful. Remember some features and add ons can be done after you move into your home. 

Please feel free to get in touch on 1300 578 278 or contact your broker or Keystart Home Loan Specialist if you would like some more information.

Keystart recommends that you seek your own independent financial advice prior to making any decisions about your financial needs. Any examples given in this post are provided for illustrative purposes only.