When is a house not a house? When is a dollar not a dollar?

I've been in two minds about this post. For a couple of weeks lots of things have been happening, but is it something I want to document? Do I want to remember this in five years? Will we have this house then?

While the basic process of gaining pre-approval, finding some land, finding a builder has been 'relatively' stress free, we weren't really prepared for what has been happening in last week or so. Our current house stands at about $430,000 to buy and build. This is pretty comparable to existing houses and we haven't thought much of it. While our loan was for $390,000 we knew that the kinky extras we added in were just for our own benefit and were prepared to weear the additional savings required. Some of our inclusions have raised eyebrows, mainly I think because while swearing this is an investment opportunity for us we have made the house ours in every way.

I feel I should recap the purpose of this build. My ultimate aim (Tom is still on the fence on this one) is to build a totally environmentally friendly house in Eltham out of either mud brick, straw or something equally unconventional. To do this requires spending considerably more than we currently have on a piece of land alone, without even considering the price of a house to put on it.

So the method to our madness was this: to get a small, inexpensive house, build equity and then upgrade. Building simply seemed to make the process cheaper as the government provides some nice incentives for first home builders. Rather than $15,000 tax and $7,000 grant the numbers are flipped, which leaves a rather pleasant lining inside the pockets.

But it's all going to pot. The house, instead of being a cheap option, keeps being loaded with hidden costs and extras. And the most recent blow with the financial hammer is that the bank doesn't believe that the build is worth it. In their view, our $430,000 house is worth a piddly $380,000, of which they will loan 95% ($361,000). So suddenly we look to be stumping up a whopping $69,000 ourselves for a house that for us was supposed to saving us money.

The "bonus" money was to go into our wedding which now may happen around retirement. While I don't feel the need to hit milestones at age points, I do feel like this is slowing us down for what we want to achieve in life. 

So now what? Do we chuck it in? Start again somewhere else. Buy and existing house? Or do we bite the bullet and build a house that could take 5 years to equalise in price, let alone gain value beyond the cost? So far we've compromised where we live, which street it's on, what the street is called, the house itself and now we have to "live like church mice" to fund it all, putting our life on hold? Doesn't seem fair.