Browse Forums Home Finance 1 Jan 27, 2013 6:49 pm I would talk to a bank but they are all closed, & i can only get in on Wens. I prefer not to be stressing for that long if i can avoid it lol We spoke to a bank about how much we could borrow etc a week or so ago, since then we have put a holding 1k deposit on a piece of land. We had been waiting for the prices to come out & were on a 'sneak peek' list & able to buy before it went to the public. We had our eye on a few of the larger blocks, so didnt want to miss out. So now to our confusion: We only want(need??) to be approved for the amount of the land at this point, ($165k), which as mentioned before when seeing how much we could borrow was more than half of what they said we could have. But is this how it works?? Can we JUST do the land side now, or do we have to be pre-approved for the whole lot? We will qualify for FHOG, & yes we will build (prefer to start the build in Nov/Dec). The reason for the delay is purely to save up more money/enough money to not be borrowing 95% or more. & we are in no rush really. We would prefer the slab down by 30th dec so we don't loose 5k on FHOG though (the world will not end if this still doesn't happen). Taking in note, we need to build within a year (so we've been told) for FHOG. We are already in talkings with builders to figure out what house (with everything/extras/basixs etc we want/need) is in our budget. We roughly know we can get 430k. But she had my income wrong by 12k a year (Meaning add my 12k extra income a year to her workings). We were hoping for 450k so we can get our #1 preference house. But if we can only get 430 that is fine & we'll go with #2. The land is not registered yet, its going in April (which we all know really means June/July haha). Its a 2nd stage release of a large development so its not a problem. Its a fully refundlabe 1k, exchange must happen by 31 March (this is fine if the bank is fine to do what we need). We have a G E credit card, which we have to have paid & cancelled (which will be) before any loan we believe. But by doing that, we then cannot 'take out the loan' until mid march. We then also have to pay our credit card out & cancel too (again no problem, will be done in July), to get our full lending amount. We are worried the bank will simply just not care & say - come back when you've done it all (cancelled/paid etc). All we need is for a loan to be approved mid march to buy our land - will this happen?? Sorry if this doesnt make sense, im also new to it all & trying to wrap my head around it. Sorry also that its a bit of an essay Any help would be great please Re: Unsure of loan reqs & other. Help please? 2Jan 27, 2013 10:51 pm I don't know that much about this but there would be an issue with financing the land separate from having it bundled together is loan mortgage insurance. If you don't have 80% of the value of the loan as deposit you will pay loan mortgage insurance when taking out the loan for the land and then again when you get the construction loan.... High I may be wrong. Also from previous experience do up a budget before you commit to the loan. What banks will approve for a loan and what you can afford are two very different things. Housing should never take up more then 1/3 of your income. Also do a budget of the things that won't be included in the build you will need to pay like landscaping, additional furniture, white goods etc.... Also site works can increase from estimates, ours went up $10,000! Good luck. Building is the most exciting and most stressful thing you can possibly do Re: Unsure of loan reqs & other. Help please? 3Jan 27, 2013 11:43 pm You can get the loan for the land only at this stage but if I were you I would also get pre approval for the house cost as well so you k ow you will be ok when you get it. If she doesn't have your income right by 12k (that's 1k per month she didn't think you had) I think you will find you may not have to cancel one or both your credit cards. I don't know who you bank with but anz have a calculator on their website that computes how much they think u could borrow based on what you put in as your income and expenses. Keep in mind your rent (if you are) while you are building. Might put your mind to rest while you wait until wed. Re: Unsure of loan reqs & other. Help please? 4Jan 28, 2013 11:12 am Thankyou. We can comfortably afford 500k or more loan, so 450 is what we are happy to pay, if that makes sense? We will ask about the insurance, paying twice?? Thankyou for that. Will also ask about pre approval for the house/construction part too - tar. I want to cancel G E - we dont need it, & its spending beyond your means IMO. Im happy to cancel our current credit card, so long as we get a V isa or M aster card option somewhere, as i find it impossible to do things with out one. Its only a 4k cc, but it effects 8k we could be loaned. So we'll just cancel it for now We've done alot of sums & figures etc. We live on a excel spreadsheet budget so we know where we stand at all times Re: Unsure of loan reqs & other. Help please? 5Jan 28, 2013 11:35 am Sounds like you are well organised! I think the loan mortgage insurance might be the only issue with doing them separately.... But there may be ways around it. You will find that most banks offer a credit card as art of the home loan package, we get our card with no annual fee and it gets reward points and we don't pay anything for it. We replaced all out other cards with it. Saves money and means we still have one for things we need. Re: Unsure of loan reqs & other. Help please? 6Jan 28, 2013 2:49 pm Two loans = two sets of annual fees, maybe two sets of application fees etc. GOODLIFE - Bravo - BUTLER http://getmistyfied.blogspot.com.au Display 20/02/2012 PPA 01/04/12 Prestart: 25/07/12 Settlement: 31/07/2012 Contracts:August Slab 19/11/12 BRICKS 10/11/12 Roof 16/01/13 Re: Unsure of loan reqs & other. Help please? 7Jan 28, 2013 3:13 pm turtleschell Two loans = two sets of annual fees, maybe two sets of application fees etc. No the idea is to combine it into a full home loan, most probably by the end of the year. We will have to pay 2 sets of fees for the loans themselves - but not much we can do about that. But once its in as 1 loan (same bank) it will be fine. They bank is aware of our plans already, we just need to get back to tell them our uptodate plan, & check we can do it the way we want. Re: Unsure of loan reqs & other. Help please? 8Jan 28, 2013 8:21 pm In regards to LMI, normally it is charged on the initial land loan component, and then when you take out the construction part, it is then charged again on the total loan value. However if you are with the same lender, you should get a credit with the LMI already paid on the land loan and only have to pay the excess. Agree with other comments that you should get a land loan together with pre-approval for a approx. construction figure. Will give you an idea if the lender will fund you the construction costs. No use buying the land and then in a few months time finding out the lender tells you sorry, cant give you anymore! Also know that the amount you can borrow with different lenders can vary greatly, so with one lender you might not be able to get the $450K preferred house, but with another it might not be an issue. Cheers Tom Re: Unsure of loan reqs & other. Help please? 9Jan 29, 2013 9:14 am Great thank you Just trying to speak to them now. Re: Unsure of loan reqs & other. Help please? 10Jan 29, 2013 9:28 am oh spoke to them, its only a small bank & she remembered us (which is good! lol) She said it should all be fine to do it that way, provided we DO pay off the debts etc, & to ensure the 1000 is fully refundable (which it is). YYAAYYY Thanks Pulse, thats really helpful and very much appreciated. Also thanks for the pointer on sheathing, thats me watching too many american youtube videos! 6 2812 Thank you so much. We ended going with the terrain that’s part of our brick. 2 2544 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 19114 |