Browse Forums Home Finance 1 Jun 06, 2009 1:59 am Hi there, Myself and my wife have decided to build in Perth and after 2 weeks of finance research, we still havent gotten anywhere! And so many conflicting stories from banks, brokers, brokers attached to builders! Thought the board would be the ultimate resource. Just a quick background......our borrowing capacity is fine, I'm stable in my job for a year and wife's just started hers, its a contract position but has a 3 month probation period, hence we are limited to pre approvals for now. I've only set a small target of signing off the building contact by end Sep for the max FHOG and going after a house and land package. Been in contact with a couple of brokers attached to builders however the response we get is it is a must for us to be on a 90% loan! I have 5% genuine savings but would want to minimize using that, hence need a 95% loan instead. Independent broker says I have Homeside who do 95% loans, but dont capitalize LMI on it. Own research says Suncorp has a 3% genuine savings option and I have an appointment with a Suncorp lender to do a pre approval. So who is right? And is Homeside and Suncorp really the only options for me? And do they make the FHOG available at land settlement? Answers are much appreciated! Re: HELP! First home buyer Construction loans! 2Jun 06, 2009 2:15 am Hello BuildingPerth, My land just settled yesterday and got the FHOG leftovers when that happened. We decided to go with Keystart as our lender as their interest rate was pretty low compared to many others. They do 98% loans and require only 2% deposit (taken out of the grant). They take their fees out and pass the grant on to your settlement agent who then take their fees out and you get the rest. We didn't use a broker. www.keystart.com.au Built with New Generation (Summit Homes) We own land!... with a slab on it! Plus a shell of a house with stuff inside ! Re: HELP! First home buyer Construction loans! 3Jun 06, 2009 12:00 pm Hi Candylea, Thanks for the response....the reason why I am trying to go with the banks is because my wife is on probation and keystart requires both of us to be in our jobs for 6 months........what do you think in this case? Re: HELP! First home buyer Construction loans! 4Jun 06, 2009 1:12 pm Another thing to keep in mind is that you don't physically get the FHOG until your home is actually started. Normally it is when the slab is poured / first prog draw. So it normally will not happen on land settlement. Some things are worth waiting for. Re: HELP! First home buyer Construction loans! 5Jun 06, 2009 4:50 pm Prior to the current economic climate. There were many banks that allowed 100% loans and 97% loans. The banks have really tightened their purse strings at the moment and are making it difficult to get into the market. Have you already got your land??? If not, if you purchase it now, once you have had your land for 3 months that can count toward genuine savings, which will be much more helpful in getting a loan. Remember your FHOG only applies to the construction portion of the loan. So as long as you sign your build contract within the timeframe you will still get your full amount. Just make sure that when you go to the bank. You have everything you need and more. Somebanks are not allowing the FHOG to be used as a deposit. You wll only receive your FHOG when slab is laid ( for contstruction) or upon setlement for bought homes. Living in Caloundra Thread****** Lovin my house all finished!!! Now tackling the HUGE task of the Garden- viewtopic.php?f=31&t=14782 Re: HELP! First home buyer Construction loans! 6Jun 09, 2009 5:32 pm BuildingPerth Hi there, Myself and my wife have decided to build in Perth and after 2 weeks of finance research, we still havent gotten anywhere! And so many conflicting stories from banks, brokers, brokers attached to builders! Thought the board would be the ultimate resource. Just a quick background......our borrowing capacity is fine, I'm stable in my job for a year and wife's just started hers, its a contract position but has a 3 month probation period, hence we are limited to pre approvals for now. I've only set a small target of signing off the building contact by end Sep for the max FHOG and going after a house and land package. Been in contact with a couple of brokers attached to builders however the response we get is it is a must for us to be on a 90% loan! I have 5% genuine savings but would want to minimize using that, hence need a 95% loan instead. Independent broker says I have Homeside who do 95% loans, but dont capitalize LMI on it. Own research says Suncorp has a 3% genuine savings option and I have an appointment with a Suncorp lender to do a pre approval. So who is right? And is Homeside and Suncorp really the only options for me? And do they make the FHOG available at land settlement? Answers are much appreciated! While your wife is in a contract role during probation, you are likely to have a tough time regardless of the % you wish to borrow. Unless of course you can borrow the whole amount just using your income. Re: HELP! First home buyer Construction loans! 8Jun 13, 2009 2:15 pm We just settled our land with Westpac. We went for full approval on the land, and preapproval on the construction. Because the full approval was for the land only initially, they lent us 92% of the land and then they based our pre approval for the construction part on using the FHOG as a deposit - so almost like we went for two loans? I am assuming if you have 5% genuine savings of the full amount you want to borrow? So more than 5% of land value? I guess I am suggesting with things how they are it might be better to go for your land first... Westpac gave us a go when other banks didn't, so I would look into them. My Thread: https://forum.homeone.com.au/viewtopic.php?f=31&t=29109 Site Start: 5th January 2010 Base stage completed: 24th January 2010 Re: HELP! First home buyer Construction loans! 9Jun 15, 2009 2:23 pm coopsmummy, that's pretty much exactly what I'm doing, but with ANZ instead. I had more than 20% deposit for the land, so I was given full approval to purchase the land with an 80% lend (so no LMI required). I have pre-approval for the construction, with the deposit coming from the FHOG. (The extra FHOG in Victoria - $32,000 if I sign the building contract after July, is actually more than 20% of the building cost... i.e. all up, I'm going to have a 78% lend, with no LMI). This is the method my broker recommended for me... so it's DEFINITELY something to consider! Re: HELP! First home buyer Construction loans! 10Jun 15, 2009 2:44 pm Hello! The following comments are not advice. . . so please don't sue me! We're with the Commonwealth bank. . . we got a 95% loan on the land last year, but since then they have brought in a new ruling that you have to be a "credit" customer with them for 6 months for them to give you a 95% loan (i.e. must have had a loan or credit card with them for 6 months or more previous to applying for the loan, and it must be still active), the most they'll lend you if you haven't is 90%. . . May be worth just approaching the bank that you currently bank with and asking them what they can do for you (as you've already built up a relationship with them). Depending on how big a mortgage you're planning on having, you should wee what the difference in LMI is for different deposits. (If we were to put in a 10% deposit instead of 5%, we'd save $10,000. . . anybody want to lend us a few grand???). Genworth have an LMI calculator here. . . http://www.genworth.com.au/homebuyercen ... /index.htm Re: HELP! First home buyer Construction loans! 11Jun 16, 2009 10:48 pm Hi Guys We paid a 3% deposit for our land loan and we paid for mortgage lenders insurance and stamp duty out of our savings up front. We also got a pre approval for the construction loan which went to a full approval for the construction loan on Friday that just passed. We paid a 5% deposit to Porter Davis which was required out of our pocket so we didnt seem to have a problem getting the finance through. We are waiting for Westpac to send us the loan offer. We have since had about another 10k put on top of the cost of the house thanks to post contract variations but we plan to use the grant to pay for this as our broker advised it would be available after the first progress payment is made when the slab is poured. As it is all through Westpac, I am told from friends who have built that each progress payment is simply added to the loan (as the land loan seems to be an interest only loan atm about 70% of a payment is going to interest) and then I am told once the final payment is made it turns into a regular loan? Does anyone know if we have to pay LMI again on the construction portion of the loan since we already paid it on the land loan? Building Sandhurst 36 Porter Davis Currently Fixing Re: HELP! First home buyer Construction loans! 12Jun 16, 2009 11:53 pm ^ I think we still have to pay lmi even if the FHOG being more than 20% of what you are lending for construction - but it is the minimal amount - i think around $800? The only way you don't pay lmi is if your contribution is more than 20% after taxes on the whole loan - construction and land. My Thread: https://forum.homeone.com.au/viewtopic.php?f=31&t=29109 Site Start: 5th January 2010 Base stage completed: 24th January 2010 Re: HELP! First home buyer Construction loans! 13Jun 17, 2009 7:15 am chickad23 Hi Guys We paid a 3% deposit for our land loan and we paid for mortgage lenders insurance and stamp duty out of our savings up front. We also got a pre approval for the construction loan which went to a full approval for the construction loan on Friday that just passed. We paid a 5% deposit to Porter Davis which was required out of our pocket so we didnt seem to have a problem getting the finance through. We are waiting for Westpac to send us the loan offer. We have since had about another 10k put on top of the cost of the house thanks to post contract variations but we plan to use the grant to pay for this as our broker advised it would be available after the first progress payment is made when the slab is poured. As it is all through Westpac, I am told from friends who have built that each progress payment is simply added to the loan (as the land loan seems to be an interest only loan atm about 70% of a payment is going to interest) and then I am told once the final payment is made it turns into a regular loan? Does anyone know if we have to pay LMI again on the construction portion of the loan since we already paid it on the land loan? We went with Westpac, Please make sure that you make it known to them that you want the funds AVAILABLE to you after slab is poured. Westpac used our FHOG to pay the slab invoice, So we have to wait until handover, when final cheque is paid, and the FHOG value is left over at the end. Then they will give it to us. If your total loan value eg (land +construction) LVR is more than 80% lend then you will have to pay LMI. Only the difference between what you have already paid for your land portion and the new LMI amount. EG We paid 7000 LMI on land then when construction potion came in the total LMI payable on the entire loan was 10540- So we just had to pay an extra $3540. Living in Caloundra Thread****** Lovin my house all finished!!! Now tackling the HUGE task of the Garden- viewtopic.php?f=31&t=14782 Re: HELP! First home buyer Construction loans! 14Jun 17, 2009 11:47 am Yep, same for us LMI was paid on the land loan. When we get the construction loan, they calculate the LMI on the whole loan (land and construction combined), then take off the LMI we've already paid, leaving us with a whopping great sum. We put down a 5% deposit on the land, but for the construction we're making the deposit up to 8% on the whole loan (i.e. we're paying 8% on the construction plus the remaining 3% on the land loan to top it up to 8%). . . we wish we could put 10% down instead, as it would save us another few thousand $$s, but that would take time to save, and we just want the house built. We looked into getting a loan with another lender for the construction, but you have to get the construction loan with the same bank that you have the land loan with. . . suppose it makes sense, if you default on the loan, imagine the debacle of two banks trying to sell one property to get their money back! 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 5925 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 19373 Hi Mrboh Just wondering if you have any BAL or flame zone issues on your block, as getting compliance with BAL requirements whilst doing bearers and joists is tough. Not… 1 8417 |