Browse Forums Building A New House 1 Jul 26, 2015 6:52 am Hi all. I'm new to the forum... Looking at building later this year. Just wondering how the payment works. Eg: 300000 house & land package. Would we pay a deposit (5% so $15000) and then pay the remaining 9% ($285000) and completion when we are handed keys. Could someone please tell me how it works and with what company you ar building. Thank you Re: Burbank and other house & land packages - Payment plan 2Jul 26, 2015 8:07 am When building a house its not as straightforward as paying the remaining advertised price at the end, This link describes the process http://www.anewhouse.com.au/2013/03/fin ... -find-out/ The Harder You Try - the Luckier You Get ! Web site http://www.anewhouse.com.au Informative, Amusing, and Opinionated Blog - Over 600 posts on all aspects of building a new house. Re: Burbank and other house & land packages - Payment plan 3Jul 26, 2015 8:47 am First read Bashworth's guide.. then his whole website! But basically, this confused me too when I first started. I went bank will lend me $300k roughly, so I need 5% deposit to buy a house, YAY I only need $15,000 in the bank.. I can do that. Wrong. First off depends if you are buying land, then a house or both together (H&L package). I went with the first option (gives you more flexibility). But basically you would go to a finance broker or bank, get preapproval for a certain amount (say 300k). You also need some savings, usually 5% of the purchase price plus costs (a broker comes in super handy for working out costs). Some banks require more than 5% though, also something a broker can work out for you. So, I'll tell you what I did because I'm no expert on this stuff, but can at least share my experience. I had $15,000 in savings, and found a house and estate I liked. I had preapproval through my broker for $300,000 divided equally between land and construction. I found land I liked in the estate and paid $1,000 to hold the land. I then signed contracts and my broker took them to my bank for full approval. I had 21 days in the contract for my bank to approve the finance or I could back out. On the last day of the contract, my bank gave me unconditional approval for the balance of the land after my deposit was paid. On this day I paid the balance of the deposit on my land i.e 5% (so my total land deposit was 5% of the cost, I had already paid $1,000 so I just paid the difference). I also had to keep another $5,000 in savings for settlement costs (i.e. stamp duty, fees). I am now waiting for my land to title. When my land is titled/settled, which is expected to happen in December this year... 18 months since I paid the deposit. My bank will pay the land people the balance of the purchase price, and I will pay the settlement fees (roughly 5-8k). Once the land is settled I can start to build, but I also have to start repaying the mortgage on the land cost i.e. $155,000.00. Now on the building side of things. I had preapproval from my broker for $155,000 for construction costs. I found a builder I wanted last year and got a quote with my approved amount. I then paid them a holding deposit of $2,000.00 to start the drawings/selections. My quote costs have gone up, so I had to ask my bank for a higher preapproval amount which I got. Once I am happy with the builder's final price and contract, I will pay him 5% of the build cost minus the $2,000 I have already paid. But I will only do this if the bank gives me unconditional approval (i.e. once contract is signed, I give it to my bank and they decide if its a good deal and then say yes they will pay the loan). Once I pay the deposit for both the land and the builder, I don't have to pay anymore money or any loan repayments until settlement/building starts. Sometimes this is the same time (for me) or sometimes you might do the two at different times. When building begins, the bank will pay the builder parts of the loan at varying stages, usually there are 5 to 4 building stages. This is called drawing down the loan. So in December I will pay settlement and make repayments on $155,000.00 loan to the bank. After the first stage of building is complete, the bank will pay the builder a percentage i.e. 20% of the loan and I will start making repayments on $170,000... and my loan repayments will grow until the house is completed and then I will make 100% repayments for the full loan amount. BEWARE.. there will be other costs during this time then just your home loan repayments and settlement costs. You might have to pay insurance, water costs, connection fees, variation fees... etc. So always good to have a little extra money saved on top of what you need. And once the house is built, you will need more money for landscaping, fencing, council taxes, etc.. I hope that helps somewhat Definitely see a broker or bank if you can, and get them to explain your process. A big builder like Burbank should be able to explain some of this to you too. Each builder has slightly different payment methods.. ALSO beware your FHOG is usually paid after building completes, and can't be used as a deposit except in very special circumstances (this caught me out!). I recently went through a similar renovation and move scenario when updating our family home. We also swapped some rooms around and tackled a major… 2 10043 Hi All, Recently we have signed a contract with Burbank and we are not aware that they have just DORSET, SURREY, HAMPSHIRE, KENT, PILBARA and REDGUM bricks from PGH are… 0 3160 regardless, your contract stipulates a payments schedule and SOPA doesn't give provision to that scenario. Your contractual terms appear to stand. Hence get a lawyer, it… 4 11869 |