Buying Land?

[Fart Cummings]

So I am planning on buying a block of land in NSW to build a house in say about 10 months!

Couple of questions!

when I apply for the loan do I only need 10% of the land price for a deposit so I can buy the block and then I can keep saving for like 10 months to get 10% of the cost of what I want to borrow to build the house?

also the first home builders grant doubles in october so if I bought the land before october that wouldnt activate the first home owners grant would it?

hope this makes sense!

 

[meowis]

How much did you buy that land for ?

 

[Fart Cummings]

How much did you buy that land for ?

85k

 

[bunsen burner]

So I am planning on buying a block of land in NSW to build a house in say about 10 months!

Couple of questions!

when I apply for the loan do I only need 10% of the land price for a deposit so I can buy the block and then I can keep saving for like 10 months to get 10% of the cost of what I want to borrow to build the house?

also the first home builders grant doubles in october so if I bought the land before october that wouldnt activate the first home owners grant would it?

hope this makes sense!

A few concerns:

1. you'll be lucky to get a DA inside 12 months. Mastertons have cookie cutter designs that are pre approved by some councils it will be approved within 10 months. Can be done elsewhere but I'd budget for 18 months - on one hand will give your more time to save, on the other more time paying interest on that whopping $$80k loan

2. $85k for a block of land? Shitsville? Might cost a premium to get built because it's likely to be in the sticks

3. How much do you think it will cost to build? $200k is on the cheapside so let's assume $200k. The bank will look at what the collateral is. If it goes **** up then all they have is $85k worth of dirt. They're not going to get their cash back. I'd suggest they'll want a lot more than 10%.

 

[Fart Cummings]

yeh its in Albury! iv already bought it! prob 10k under market value! bloke had to sell!

old man is a Builder and im a chippy by trade but haven't done it for a few years!

hopefully do a lot of it myself!

 

[bunsen burner]

yeh its in Albury! iv already bought it! prob 10k under market value! bloke had to sell!

old man is a Builder and im a chippy by trade but haven't done it for a few years!

hopefully do a lot of it myself!

Is it vacant?

And do you intend to live in it or sell it?

I guess you old man will know the cost to build. I'd go talk to loan guy. Most are happy to collude in creativeness

Might go something like this:

It costs you $150k to build because your Dad isn't taking a margin. But your Dad's company quotes $200k. You say you're paying $50k with your own money and need to lend $150. That's a 25% deposit right there.

 

[Visions]

Lenders will take the land value and cost to build (as valued by lender) as their total value. You will need a fixed quote from a registered builder (your dad), lenders don't do owner builder loans nowadays unless you have a huge deposit. Catch is construction loan part won't get unconditionally approved until DA is obtained from council.

Also pray the land value doesn't drop by the time you apply for construction loan. Otherwise you could be up for more out of your own pocket.