Browse Forums Building A New House 1 Feb 22, 2010 11:01 am Hi All, We are thinking of buying land perhaps this year hopefull :S however we don't intend on building on it just yet. Is it possible to buy land pay it off as much as you can and use the amount you have paid off as kind of like equity to build the house?? For obvious reasons land prices go up every year.. or perhaps every 1/4. So we thought.. if we buy land now it would be good and it might save us $$ later on.. Any thoughts on this? we are in sydney.. http://dreamzattheponds.blogspot.com To be invited to our blog send a PM with your email. Settled on land 25th June Exchanged contracts on Land April 14th 2010 Building our First Home Re: Buying Land? 2Feb 22, 2010 11:08 am Hi It is possible to do as you say, we had our land for over a year before we took any action to build, however if you buy in an estate with covenants sometimes they require you to commence building within a certain period of time. Re: Buying Land? 3Feb 22, 2010 11:40 am wow thanks for the feedback appreciate it. What about using the land as equity? did u still have to save 20% for the house as well ( initial deposit..) im presuming it can be done.. http://dreamzattheponds.blogspot.com To be invited to our blog send a PM with your email. Settled on land 25th June Exchanged contracts on Land April 14th 2010 Building our First Home Re: Buying Land? 4Feb 22, 2010 11:48 am When it came time to finance the build the bank valued the land again therefore taking into account your further equity and of course value increases it works in your favour. I hope that makes sense they got a total value being the new valuation on the land and the contract build price. Re: Buying Land? 5Feb 22, 2010 12:02 pm mdzzj When it came time to finance the build the bank valued the land again therefore taking into account your further equity and of course value increases it works in your favour. I hope that makes sense they got a total value being the new valuation on the land and the contract build price. The problem is that the bank does not always value land in your favor. In a year the land in our estate has appreciated by 40K (comparing the price of land of the similar size NOW to what we paid in the past) however, the bank did not reflect it in their evaluation at all. Moreover they did not pay any attention to any of the "cool" features being smart wiring, air-con, high quality floor etc.. Everything was very straightforward - the median sale price in the area (not even the suburb), minus 20K and that was the evaluation... So, we found ourselves freezing most of our expenses to come up with an additional 40K of money on top of the deposit... A sort of "catch 22" the bank new that I was eager to start the construction and to avoid any delays (and price increases due to the tender expire) and will sign everything. Not very good of them but.. if we had another choice... On the other hand - our debt will be smaller. ... built a Promenade with Clarendon. viewtopic.php?f=31&t=25104 20-10-09 - excavation and piering completed ... 12-04-10 - Basins fixed. Connecting to the electrical grid 23-04-10 - PCI 07-05-10 - HANDOVER! Re: Buying Land? 6Feb 22, 2010 12:12 pm Yep, any increase in the equity you have in your land (whether by repayments and/or land value appreciation) should be taken into account when the doing the final valuation for your construction loan. This might save you some LMI (loan mortgage insurance) if your overall equity is less than 20% (it did for us ). However, I don't think it will increase the amount the bank will lend you as this is determined more by income than assets. Other more experienced forumites will hopefully confirm this! 'We make a living by what we get, but we make a life by what we give.' - Winston Churchill Re: Buying Land? 7Feb 22, 2010 12:22 pm Awesome great insight! I love this forum . We will be getting some advice when it comes time to finalising things with the "potential" land purchase when we are ready. now i guess just research the market?? in new developing areas.. http://dreamzattheponds.blogspot.com To be invited to our blog send a PM with your email. Settled on land 25th June Exchanged contracts on Land April 14th 2010 Building our First Home Re: Buying Land? 8Feb 22, 2010 12:26 pm Yeah as mentioned above just pays to check with the estate itself if there are any restrictions on how long you have before you need to build something on the land. Our estate (Beveridge) allows us a 3 year period before we have to do anything on the block (Once started though it must be completed within 9 months or so I think [allowing for builder delays]) but I know of other ones that you have to build within 6 months. So it really does pay to ask Land Deposit - 18/12/2009 Became a land Baron - 21/12/2010 Site Start - 27/1/2011 All moved in!! Re: Buying Land? 9Feb 22, 2010 3:52 pm It might also be worth while speaking to your bank/preferred lender - we thought in the exact same manner as you, we'll buy the land, pay as much off it as we can and then build. But when we went to the bank and they explained to us that we would be paying off an empty block that appreciates in value a heck of a lot slower then land with an actual house on! Kind of made sense (especially considering we currently have a small mortgage on the unit we are selling) So the aim for us is to build on the land sooner so it's net worth is more than it would be empty!!! (But again, everyone's circumstances are different - and our covenant stated that we had 2 years to commence building on our block!) Sleven Moved into our Atlantique MkII 36 by Carlisle Homes Re: Buying Land? 10Feb 22, 2010 4:26 pm Hi Dreamz, Another thing to consider is Land Tax. http://www.osr.nsw.gov.au/taxes/land/ A lovely NSW Office of State Revenue charge. Cheers Bel Still not in. Don't ask!? Re: Buying Land? 11Feb 22, 2010 6:34 pm Thanks all. great advice. http://dreamzattheponds.blogspot.com To be invited to our blog send a PM with your email. Settled on land 25th June Exchanged contracts on Land April 14th 2010 Building our First Home Yeah I don't know why I came to a forum. Place is full of wierdos/pedos thought internet may help but I suppose I'll try my luck with someone in person. Cheers. I tried… 0 6390 Need advice on the backyard plan above. Should I excavate and cut all of the dirt to level with the house slab or semi-excavate as per photo above? Both left and right… 0 24830 13 6602 |