Browse Forums Home Finance 1 Feb 20, 2009 1:03 am Hi all, just a quick one. Could anyone tell me if the lenders will finance for a vacant block the same as a house (ie: 80% finance). BOOM SHANKER..!! - Neil (The Young Ones) Re: Land finance? 2Feb 20, 2009 7:09 am charlie0000 Hi all, just a quick one. Could anyone tell me if the lenders will finance for a vacant block the same as a house (ie: 80% finance). Yep, sure will. Pay no attention to the "land loan" products on their websites. When I purchased my block I thought I'd be up for the 20% deposit as well but then my broker told me that I can apply for standard loans because most cover land as well. My loan is 95% finance for the land. Stevep79 & Principessa Finished building Wisdom Homes Impression 33mkII in The Ponds, Sydney http://lilypadintheponds.blogspot.com Re: Land finance? 3Feb 20, 2009 7:28 am That surprises me Stevep79. When I was a lending manager it was a maximum of 90% for vacant land but 95% for established homes or house&land packages. Of course this was 4yrs ago.
What you also have to remember is that anything over 80% is subject to mortgage insurance which basically means the bank no longer has the final say but you must meet all the conditions set out by the mortgage insurer to obtain the loan. Some things are worth waiting for. Re: Land finance? 4Feb 20, 2009 8:08 am kyton That surprises me Stevep79. When I was a lending manager it was a maximum of 90% for vacant land but 95% for established homes or house&land packages. Of course this was 4yrs ago. What you also have to remember is that anything over 80% is subject to mortgage insurance which basically means the bank no longer has the final say but you must meet all the conditions set out by the mortgage insurer to obtain the loan. Surprised me as well to be honest! If you look at the bank land loan products, they all still say maximum 90%. For some reason, they allow you to do land on their normal products as well and you just roll it up with the construction loan later on. Kind of defeats the purpose of having their land loan products. Mortgage insurance on 95% isn't too bad, from memory it was about $4k on a $280k mortgage. Stevep79 & Principessa Finished building Wisdom Homes Impression 33mkII in The Ponds, Sydney http://lilypadintheponds.blogspot.com Re: Land finance? 5Feb 20, 2009 5:34 pm stevep79 kyton That surprises me Stevep79. When I was a lending manager it was a maximum of 90% for vacant land but 95% for established homes or house&land packages. Of course this was 4yrs ago. What you also have to remember is that anything over 80% is subject to mortgage insurance which basically means the bank no longer has the final say but you must meet all the conditions set out by the mortgage insurer to obtain the loan. Surprised me as well to be honest! If you look at the bank land loan products, they all still say maximum 90%. For some reason, they allow you to do land on their normal products as well and you just roll it up with the construction loan later on. Kind of defeats the purpose of having their land loan products. Mortgage insurance on 95% isn't too bad, from memory it was about $4k on a $280k mortgage. I am not proud of it (the customer made me do it) but I have done a few 95% plus LMI land loan followed by 97% plus LMI construction loan on council approval. That was before the crunch but I am happy to announce the borrowers are still in very good shape. Land loans 6Feb 20, 2009 5:46 pm It is still possible to borrow up to 100% for land + construction. However you have to have low personal debts, a decent asset position, strong employment, perfect credit history and an excellent income. In other words the lenders are very conservative for this type of loan.
95% + LMI is much easier to get. Personally I am a little uncomfortable with people borrowing too much for vacant land or construction. This is because: * Land tends to fluctuate in value more than houses do. If you need to sell it may not be possible to do so. * There may be a lot of unexpected costs associated with building or with getting DA Approval on your land, which many people do not budget for. * You will have to pay rent while you are building. This means you are paying rent and paying a mortgage for some time. If construction gets delayed this can put pressure on your finances. I generally only recommend these high lends for customers with good incomes. Otherwise it is too risky! you were just referred to get advice from your solicitor. This is a legal matter. Separately, why would you use a buyers agent for a house and land package? 3 60214 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 6654 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 25134 |