Browse Forums Home Finance 1 May 04, 2016 9:44 pm Hi everyone! My partner and I are building our new home in Victoria. We purchased our block last year for $135,000 and had a deposit of $35K. We are planning to build in December and will have approx $60K saved (includes $10K first home buyers grant). Quote for our house is roughly $300-310K (depending on site costs). My partner's salary is roughly around $90K and I am around $65-70K. No children. I am speaking with a bank later this month for pre-approval but wanting some advice. Would you recommend a bigger deposit for this loan? would love some input/advice as I am concerned we may be rushing into building by December (in order to receive the 10K). Thanks in advance Building with Rawdon Hill - Denmark 326 In Yarragon Re: Deposit/loan advice 2May 05, 2016 7:31 am Just to clarify does the $60k savings (including the $10k grant - which the bank won't see as savings just FYI) also include the $35k you had at land stage or is that additional? Either way you're looking ok for deposit from my very rough maths, and without looking at affordability at all. Is it all genuine savings, that is regular savings you've been putting aside? (Apart from the grant) Rebecca Jarrett-Dalton Property crazy expert mortgage broker, love building new homes! Two Red Shoes mortgage broker http://www.tworedshoes.com.au/building Re: Deposit/loan advice 3May 05, 2016 7:51 am Thanks for your response! The 60K is additional savings on top of the 35K saved during land stage. All genuine savings from beginning of last year. Was concerned if it's affordable and if the bank would want a bigger deposit.. Will this deposit be enough to avoid mortgage insurance? Building with Rawdon Hill - Denmark 326 In Yarragon Re: Deposit/loan advice 4May 05, 2016 8:23 am Mortgage insurance drops off at 80% LVR. So rough napkin math, youre at 19% deposit on 310k house with the first home builders grant 16% if only 50k is considered. IIRC LMI amount is relative to how far of 20% deposit you have so it might not be a huge deal to cop a little LMI. Although I'm unsure if the remaining liability on the land will be tKen into account in the LVR calls given its seperate to the construction loan. Re: Deposit/loan advice 5May 05, 2016 7:37 pm Hi Kylie, Providing the valuation comes up ok & according to my rough maths you should have 20% deposit and avoid mortgage insurance. You might need to consider finishing items like driveways, fencing, floor covering, window coverings etc - and allow for these or are they them included in the contract? Regards affordability - would need to have a full conversation with you to determine what else you have going on & whats comfortable for you - based on just the information provided here you have plenty of room to move on the banks calculators. Happy building! 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: Deposit/loan advice 6May 11, 2016 1:21 am Ponzu Mortgage insurance drops off at 80% LVR. So rough napkin math, youre at 19% deposit on 310k house with the first home builders grant 16% if only 50k is considered. IIRC LMI amount is relative to how far of 20% deposit you have so it might not be a huge deal to cop a little LMI. Although I'm unsure if the remaining liability on the land will be tKen into account in the LVR calls given its seperate to the construction loan. When the bank does the valuation, they will take into account the land and construction as one for LVR purposes. As the OP already has equity in the land (and assuming it hasn't changed or has in fact appreciated), and if they don't overcapitalise on the construction, then LVR should be under 80% and no LMI applicable. As for their borrowing capacity, as Bec suggested it deserves more scrutiny to come up with the complete financial picture, but at first glance and if there are no other major liabilities, then that shouldn't be a problem. Cheers Tom 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 19068 In NSW the maximum deposit for building work is 5% until the builder provides HBCF insurance 1 4814 Hi, you've probably already resolved this, however, Commbank will probably pay the funds to you after you send evidence the work is done regardless the change in the quotes. 1 35305 |