Browse Forums Home Finance 1 Aug 19, 2014 6:38 pm Hi, I am looking to buy a block of land and then build. From talking to the land developer and builder this is what I understand of the equation for 'ready cash' required before we go in. Land price is 225,000 Deposit required 5,000 ---- Loan on land 220,000 Total build cost is 200,000 Keep 5% in hand for council costs etc till bank starts paying = 10,000 ----- Loan on construction 190,000 Total loan amount: Land: 220,000 Construction:190,000 FHOG: - 15,000 --- =395,000 5% deposit for loan = 19,750 (20,000 to round off) -- Total cash in hand required: Land deposit: 5,000 Construction: 10,000 5% deposit on loan: 20,000 = 35,000 Is that calculation correct? I didn't really understand why the builder wants me to put that 5% of building cost aside for payments before council approval. I thought all building cost apart from the initial $1750 during pre-contract is what we should pay for the builder, and the bank takes care of the rest. I might have to sacrifice my media room plans if that's the case Regards, Sidds Re: Ready cash calculation for purchasing land and building 2Aug 19, 2014 7:26 pm There are a lot more costs than just the cost of the land and the builders initial price (see http://www.anewhouse.com.au/2012/01/what-will-it-cost/) 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: Ready cash calculation for purchasing land and building 3Aug 20, 2014 7:02 pm Hi Sidds! Congrats on taking your first step into buying a home. The lenders will assist with a maximum 97% loan inclusive of Lenders Mortgage Insurance fee. They will value your land & construction as $425,000 ($225,000 + 225,000) which they will lend 93% and this equates to a $395,250 loan amount. This means you will require $30,000 to complete this purchase. If you pay $5,000 you will still require $25,000 and council fees. You will receive the $15,000 grant which will cover part of these funds you need. What state in Australia are you in as there will be stamp duty concessions for different states. Another option is to use a Family Guarantor which will provide 100% lending. Hank. Re: Ready cash calculation for purchasing land and building 4Sep 10, 2014 5:08 pm Hi Guys, Thanks for the replies. I think I was making the mistake of thinking that 5% deposit (real savings) needs to be deposited with bank which is on top of our cost (contribution) towards the building. Newbie mistake from my side I had set aside 5% deposit off the total cost, plus another chunk for any extras I spend on (electrician and fittings, turf, etc), another chunk for legal and govt. fees. I was also saving up a bit for building a media room. I didn't realize the land deposit and builder's deposit comes off the 5% (real savings) We have now signed land and building contract, paid land and building deposit. Land settles in October, have all the colour selections lined up through out the month. Really excited. Cheers, Sidds Hi, My home construction is complete, and the handover is scheduled next week. However the construction has been delayed and I have raised this to the builder. The… 0 4412 Yes you are correct, unless there are outside works which form part of the contract such as landscaping or driveways, and importantly, the work delayed is on the critical… 1 2546 Use a product like Equisol's Vitalise to clean the deck then coat with a penetrating timber oil. It will look 10 years younger and add value to your home. Visit for… 1 11214 |