Browse Forums Home Finance 1 Feb 18, 2015 8:36 am So, we have decided to go ahead with home and land package with Porter Davis. The land will be titled in July 2015. So, we have enough time to save more towards our deposit. We already have around 50K plus 10k(to manage stamp duty and other expenses). We are thinking of signing a contract for a land. The contract will be signed in around April. We had a chat with one of the brokers(Choice, recommended by PD) and the lady said we would have to pay 5% of the land cost while signing this contract. At this point, we wouldn't be having any loan because we also want to add upgrades packages to our loan amount. My question, how things work out regarding loan application? Is this amount refundable in case the loan doesn't get approved or we are bound to pay the remaining amount legally? Sorry, if the question seems stupid as we are trying to comprehend the nitty-gritty of everything. Building the Bermuda 23 (In Frame Stage) by Porter Davis in Livingstone , Cranebourne East Re: Home + Land loan - information 2Feb 18, 2015 8:47 am Hi, depends on the state as to when you pay - but if you buy the land - yes you will need to pay the deposit as per the contract. What I do is (before I let my clients pay the deposit) get a full approval for the land loan and a preapproval for the build loan. Then you know you can put your money in with confidence! Enjoy the build. Rebecca Jarrett-Dalton Property crazy expert mortgage broker, love building new homes! Two Red Shoes mortgage broker http://www.tworedshoes.com.au/building Re: Home + Land loan - information 3Feb 18, 2015 9:00 am becjarrettdalton Hi, depends on the state as to when you pay - but if you buy the land - yes you will need to pay the deposit as per the contract. What I do is (before I let my clients pay the deposit) get a full approval for the land loan and a preapproval for the build loan. I do not want to buy a land without getting a confirmation of house and land loan. Because, if I pay the initial 5% deposit and loan doesn't get approved, I will be in deep trouble. Is pre-approval for build loan subject to change? In my scenario, the land has not been released yet and also, build contract hasn't been signed. So, I won't be sure how much the upgrades would cost. Building the Bermuda 23 (In Frame Stage) by Porter Davis in Livingstone , Cranebourne East Re: Home + Land loan - information 4Feb 18, 2015 9:48 am Absolutely agree. As to the loan approval being subject to change - yes they expire typically in 90 days. The answer is if your circumstances have not changed to the negative you 'should' be able to renew the approval. The only way to get a full approval for both land and building is to have the full build contract with specifications and plans - and I would recommend you have your builder include a provision for the upgrades you anticipate. Ask the builder if you can do your selections now or if they can cost out the things you're pretty certain you'll need and get the provision built in now - if you don't proceed with those upgrades they can be varied out later on. The full approval can still expire before the land is registered. Rebecca Jarrett-Dalton Property crazy expert mortgage broker, love building new homes! Two Red Shoes mortgage broker http://www.tworedshoes.com.au/building Re: Home + Land loan - information 5Feb 18, 2015 9:55 am Thanks Bec. I suppose there will be a "subject to finance" clause in the land contract. If not, I will try to include that to be on safer side. Referring to this thread, viewtopic.php?f=9&t=75738 has given more information and the OP had exactly the same situation that I have right now. I will talk to PD once again and ask the questions that you suggested. Building the Bermuda 23 (In Frame Stage) by Porter Davis in Livingstone , Cranebourne East Re: Home + Land loan - information 6Feb 18, 2015 4:25 pm Hi hsingal, 'Subject to finance' may not last till July 2015. I agree with Bec and think it is better to get full approval on land and a pre-approval for the max that you think the construct will cost. Cheers, Obu Re: Home + Land loan - information 7Feb 18, 2015 6:39 pm ObuRamaraj Hi hsingal, 'Subject to finance' may not last till July 2015. I agree with Bec and think it is better to get full approval on land and a pre-approval for the max that you think the construct will cost. Cheers, Obu Yes, i will try to get full approval. But I didn't understand what you meant by 'may not last till'. Could you please elaborate more? Building the Bermuda 23 (In Frame Stage) by Porter Davis in Livingstone , Cranebourne East Re: Home + Land loan - information 8Feb 18, 2015 10:48 pm hsingal Yes, i will try to get full approval. But I didn't understand what you meant by 'may not last till'. Could you please elaborate more? Normally when negotiating a subject to finance clause, you will find that many vendors will only allow a few weeks at most. It's rare that they will allow a subject to finance clause to extend out many months (and sometimes years) for land that isn't being registered for a long time. Cheers Tom Re: Home + Land loan - information 9Feb 19, 2015 9:12 am plc hsingal Yes, i will try to get full approval. But I didn't understand what you meant by 'may not last till'. Could you please elaborate more? Normally when negotiating a subject to finance clause, you will find that many vendors will only allow a few weeks at most. It's rare that they will allow a subject to finance clause to extend out many months (and sometimes years) for land that isn't being registered for a long time. Cheers Tom So, what are my options if the loan 'do not last' till release date? 1. back out of the deal if land is not released within the time frame. Do I get my deposit back? 2. reapply for loan to accommodate the new release date and wait 3. ?? Building the Bermuda 23 (In Frame Stage) by Porter Davis in Livingstone , Cranebourne East Re: Home + Land loan - information 10Feb 19, 2015 1:26 pm The trouble is the length of time between when you're applying for the loan (now) and when the land titles. Can you find land that is ready to go? It's always challenging with new estates & long registration periods because anything can happen between now and then - but - (no guarantees) most people are ok with it and are ok to settle on time. Bec Rebecca Jarrett-Dalton Property crazy expert mortgage broker, love building new homes! Two Red Shoes mortgage broker http://www.tworedshoes.com.au/building Re: Home + Land loan - information 11Feb 19, 2015 2:42 pm Unfortunately no, the title is due in July or August. I am Ok even if there is a delay provided I am not slapped with some surprise inflated costs due to delay in release or something else. If it happens, it will really bite back very hard. Following certain threads here, I found that some people were asked to pay some extra money just because there was a delay in release or construction was started late after land title. In both these cases, there was no mistake of any buyer but still they were asked to pay. Building the Bermuda 23 (In Frame Stage) by Porter Davis in Livingstone , Cranebourne East Re: Home + Land loan - information 12Feb 19, 2015 2:45 pm For the block or for the build? There shouldn't be additional costs for the block - the build price can change if materials rise. Rebecca Jarrett-Dalton Property crazy expert mortgage broker, love building new homes! Two Red Shoes mortgage broker http://www.tworedshoes.com.au/building Re: Home + Land loan - information 13Feb 20, 2015 1:33 pm Hsingal, you should be able to get full approval on the land - even if titles are not available now. This way you know whether your land loan will be approved. For the building, it will be a pre-approval only. Re: Home + Land loan - information 14Feb 23, 2015 4:33 pm hsingal plc hsingal Yes, i will try to get full approval. But I didn't understand what you meant by 'may not last till'. Could you please elaborate more? Normally when negotiating a subject to finance clause, you will find that many vendors will only allow a few weeks at most. It's rare that they will allow a subject to finance clause to extend out many months (and sometimes years) for land that isn't being registered for a long time. Cheers Tom So, what are my options if the loan 'do not last' till release date? 1. back out of the deal if land is not released within the time frame. Do I get my deposit back? 2. reapply for loan to accommodate the new release date and wait 3. ?? Normally, people would sign the contract for the land and then apply for the loan when the land is registered and titled. In Vic they give you about two weeks to settle after this happens (registration). Cheers Tom Re: Home + Land loan - information 15Feb 23, 2015 4:35 pm ObuRamaraj Hsingal, you should be able to get full approval on the land - even if titles are not available now. This way you know whether your land loan will be approved. For the building, it will be a pre-approval only. How can this happen if there is no security for the lender in the form of the land? Cheers Tom Re: Home + Land loan - information 16Feb 23, 2015 8:53 pm You definitely can get full approval of the land loan before the block is titled / registered. It can't "settle" so they can't release any money but it can be approved. I have several clients in this position right now. Rebecca Jarrett-Dalton Property crazy expert mortgage broker, love building new homes! Two Red Shoes mortgage broker http://www.tworedshoes.com.au/building Re: Home + Land loan - information 17Feb 24, 2015 10:14 pm becjarrettdalton You definitely can get full approval of the land loan before the block is titled / registered. It can't "settle" so they can't release any money but it can be approved. I have several clients in this position right now. With valuation on the land all done? Re: Home + Land loan - information 18Feb 24, 2015 10:15 pm Yes. Rebecca Jarrett-Dalton Property crazy expert mortgage broker, love building new homes! Two Red Shoes mortgage broker http://www.tworedshoes.com.au/building Re: Home + Land loan - information 19Jul 07, 2016 12:19 pm Hi becjarrettdalton. What is the average timeline to get full approval of the land loan after getting pre-approved? We were advised by our solicitor that our land might settle by end of this month and now arranging for full approval. So I'm a little worried that we might not meet the deadline. Cheers! Re: Home + Land loan - information 20Jul 08, 2016 6:29 pm dyansky, Different banks have different approval times depending on number of applications in the 'queue'. Goto a competent broker and tell them your time restraints and they should know the approval times. Be very careful of the "yes" men. Yes to everything and under deliver. Anyways there is usually a small window to settle the land. Most of the time contracts are 'within 2 weeks of registration'. But get started sooner than later. I've bought property (auction) and >>settled<< within 2 wks, but thats very unusual circumstances, and NOT the norm. 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