Land and House Package for Loan Approval

LPOTATO10 on 03/04/2019 - 10:18
Last edited 03/04/2019 - 10:38 by 1 other user

I am looking to put a deposit on a land which is titleling May 2020 in Victoria to build a house after tiltlement.

Since I had credit issues in the past (which has since changed and very stable financially now) my options are limited to a few lenders for my mortgage.
The one i got an assessment with and with the best interest rate I could get 4.99%(PEPPER) are only going to lend me if I go for an off the plan, (packaged from developer option).

The land developer sales person has advised that they will help me get a house package on the land once I put the deposit on the land and they have contacted a few builders to give me options of houses and they got back to me with something which we budgeted for (land $260K plus build $290K = $550K)

But I would like to chose my own builder and am not to sure how the whole thing is going to work? As I can see from some builder they have the house I want for $270k to build. So do I just add this to my land price and is it going to be the same ($270K build + $260K land) or do they have additional charges?

As most house and land packages I see with the same size land and house in the same area are like 70k or 100k more. Also how would this work in terms of mortgage? Would I have to pay /apply for mortgage at land entitlement or once the house is built and ready to move in?

Any advice would be much appreciated.

• 

  Typical16-bitEnjoyer on 03/04/2019 - 10:31

  +1

  What did your mortgage broker say when you asked them?

  • 

    GG57 on 03/04/2019 - 10:39

    +1

    They appeared to say "…are only going to lend me if I go for an off the plan, (packaged from developer option)…"

    • 

      Typical16-bitEnjoyer on 03/04/2019 - 13:02

      Well I interpreted OP's post as they have discussed finance with the developer (which is a terrible idea)

• 

  POTATO10 on 03/04/2019 - 11:04

  the finance company only going to lend me if I go for an off the plan, (packaged from developer option)(turn key option)

• 

  team teri on 03/04/2019 - 11:29

  The best bet would be to ask the land developer whether they are willing to do a house and land packet with a builder of your choice or if they are limited to their range of existing business partners.

  Also to ask the builder what other costs you might need to budget for. When I built long ago in a different state, there were lots of extra costs on top of the advertised price (they called them site costs) and the house package didn't include things like cross-over, floor coverings, blinds.

  • 

    POTATO10 on 03/04/2019 - 11:50

    thank you :)

• 

  elgrande on 03/04/2019 - 11:33

  +2

  Given the lenders advice, I would only be putting my money down for an actual land and house package, not something the sales person claims they can organise after you put your money down.

  • 

    POTATO10 on 03/04/2019 - 11:49

    thank you , thats great advice :)

• 

  mortgagebroker on 03/04/2019 - 12:08

  I guessing the Pepper product that has been offered to you does not do construction.
  This is why it needs to be a turn key option.

  Try another lender.

  • 

    POTATO10 on 03/04/2019 - 12:28

    CORRECT , they want it to be a direct buy off the plan.
    do you know of other lenders that would consider my situation and will provide land and construction laons?

    • 

      Typical16-bitEnjoyer on 03/04/2019 - 13:03

      I know who could answer that question for you - a qualified mortgage broker…

    • 

      mortgagebroker on 03/04/2019 - 13:03

      Try Resimac.
      Without knowing your situation completely I can't really give options.