Browse Forums Building A New House Re: 2 Loan Contracts, 1 for land 1 for house. 2Feb 01, 2009 5:24 pm A thankful person is a happy person. [/color]My hobby design blog: http://aviewondesign.blogspot.com/ Re: 2 Loan Contracts, 1 for land 1 for house. 5Feb 01, 2009 7:09 pm Building Thread viewtopic.php?f=31&t=13002 Site start: 8th July 2009 Handover: 11/12/2009! 5 months total build time. 40 sqs of luxuary...Bliss! Re: 2 Loan Contracts, 1 for land 1 for house. 6Feb 01, 2009 8:01 pm Blog - http://snakedr.blogspot.com/ Build Thread - viewtopic.php?f=31&t=12084&p=307406#p307406 Status - PCI 15/10. Things nearly done. Re: 2 Loan Contracts, 1 for land 1 for house. 13Feb 02, 2009 6:53 am Blog - http://snakedr.blogspot.com/ Build Thread - viewtopic.php?f=31&t=12084&p=307406#p307406 Status - PCI 15/10. Things nearly done. Re: 2 Loan Contracts, 1 for land 1 for house. 14Feb 02, 2009 8:48 pm We bought our land about 6 months before we finally decided on a house to put on it, so there wasn't any chance of having one loan
As soon as our construction loan is fully drawn out though (when progress payments etc finish) we're able to combine our land loan and construction loan into one loan so that we don't have to deal with two direct deposit payments (not that this is an issue though - it just means we don't have to worry about which loan to put extra repayments onto). Both loans have the same interest rate though. I'm not sure how it would go if the land loan and the construction loan were on different interest rates?? If you're concerned about paying the loan while paying rent, see if there's any chance you can pay Interest Only on the land loan until the construction is finished. This may make finances a bit more manageable?? Re: 2 Loan Contracts, 1 for land 1 for house. 15Feb 03, 2009 9:23 pm For me it is better to have two loans; land & construction loans. Also you should complete the settlement of your land before applying for a construction loan otherwise you might have problem with the valuation. Re: 2 Loan Contracts, 1 for land 1 for house. 16Feb 04, 2009 8:30 pm So if I have this right and proper home and land package one where the builder already owns the land or the owner of the land has already packaged a house on the land that is the only way you can have one loan.? Re: 2 Loan Contracts, 1 for land 1 for house. 17Feb 04, 2009 9:18 pm gilese So if I have this right and proper home and land package one where the builder already owns the land or the owner of the land has already packaged a house on the land that is the only way you can have one loan.? Initially you will have two loans (one for land and construction loan) but once the construction of the house finishes, the bank will merge the two loans. Re: 2 Loan Contracts, 1 for land 1 for house. 18Feb 04, 2009 9:30 pm gilese My main concern is having enough to pay rent and to pay for the loan. Is there any options out there to have the loans delayd until you move in? The construction loan is release by stages. For example, the builder might require you to pay x amount after pouring concrete. The bank will give you this x amount. You will then start paying interest for x amount. 3 months later builder finish laying out bricks and request you to pay y amount. The bank will release y amount. You will now be paying interest for x + y amount. This goes on until building completes. Hope my explanation makes sense. land and construction loan while paying rent 19Feb 04, 2009 10:38 pm gilese So if I have this right and proper home and land package one where the builder already owns the land or the owner of the land has already packaged a house on the land that is the only way you can have one loan.? Not really, there are lenders that will give you one loan even if it's not done in the way you describe. But I think you are paying too much attention to the number of loans, what is important is the total loan amount and when your repayments start (which I think is your main concern). The lender will approve a total loan amount for the whole project, advance you enough for the land first (if your developer requires you to settle land first) and release funds in stages (usually 5 stages) as the builder completes the agreed stages which increase your repayments incrementally. Mind you you'll only be paying interest during this time (not principal). Your earlier concern of paying rent while you are paying interest on the land portion as well as progress payments is unavoidable. The only way you avoid this is when you buy a completed home and paying the same interest (only built into the price!). The biggest challenge will be if you take out a loan and then run out of money - you'll have an incomplete security and lenders do not like this so you can get stuck.… 2 19097 MBA and HIA both have sub contract agreements, check them out 2 7315 Industry type domestic contracts are prepared by industry bodies for the benefit of the builders. This means that if you are the owner watch out. One of the points is… 0 3226 |