Browse Forums Home Finance 1 Apr 22, 2009 3:27 pm Hi all, I've made a few threads in the past, but it's finally crunch time. I do have a broker, but I basically need assistance to get my head around everything before I talk to my broker again. I have decided to take advantage of the $26,000 to build my first home. I have put a $1,500 deposit down to the builder, and $500 to the real estate agent for the land (including signing the land contract, I now quickly need to find a conveyancer). Here are the prices I now owe (these are prices with deposits removed): House: $144,000 Site Cost: $12,000 (estimate) Land: $107,500 Total: $263,500. (I'd expect a total loan of maybe $270,000 including fees, MLI etc?) I have $20,000 in savings, and would expect to have around $23,000 by the end of June (land settles on the 26th June). My broker wanted to do a 5% lend, using my own cash, then using the rest for stamp duty & fees. Then I get the $26,000 FHOG back later to dump straight onto the mortgage (banks really seem to have tightened things down lately!). Now this is where it starts getting complicated... and where I need some help. The real estate agent wants a 10% deposit of the land ($10,300) near the end of May (one month before settlement). The agent said it was best to use a deposit bond for this, to make it easier for obtaining the loan. And this is where I get confused... My broker, on the other hand, said a bond isn't really needed... But if I pay $10,300 in cash, then I wouldn't have enough left over to cover the 5% for the total amount, plus stamp duty + fees? How do people do this normally? - Gareth First home buyer Deposit Bond advice 2Apr 23, 2009 2:08 am You need a deposit bond if you don't have the cash to pay the deposit. You can arrange the deposit bond on unconditional approval of your home loan. However your mortgage broker may be correct if the vendor's solicitor accepts a 5% deposit instead of the standard 10%. You would still be liable for 10% as per contract but they can and often do accept 5%. Re: Help required for a first home buyer! 3Apr 23, 2009 2:42 pm Thanks for that! Now it makes sense about the 5% of the land... that's what the broker was doing, yet the contract was saying 10% by deposit bond! However, it's all falling apart at the seams..... the land contract has a settlement date of 26/06/09, but a formal loan approval required by 26/05/09. There has been a communications issue between the builder and the real estate agent, as there is *no way* the builder can have the building contract ready by 26/05/09 for me to get formal approval... (I needed both land and building contract to get formal approval). In other words, I won't have formal approval by 26/05/09.... Which would mean I would then need to split the loan, and have a separate land and separate building loan.... this all just seems a bit much for a first home buyer with minimal (20k) savings! EDIT - The builder & real estate agent & broker have all been talking to one another on my behalf, to sort it out. The end result... I will be doing the land first, and will be meeting the broker again this weekend to sort out a new loan. I didn't realise it'd be so stressful, so soon! Not much in this responce. My suggestion is, what are you looking to build and why. This will all be impacted by the local councils planning scheme. Familiarise yourself… 6 4946 Thanks for info, yes met with Power Utility, Builder's Site Supervisor and Electrician on site and aligned on the mains connection. Seems like the builder and Electrician… 2 9995 I know foam has been around since the 90's and CSR started manufacturing Hebel in 1989, so it's definitely possible 5 4116 |