Browse Forums Home Finance Re: Using Land as a 'deposit' on building loan? 2Sep 14, 2016 7:46 pm Naritas Finance w: https://www.naritas.com.au l: https://www.facebook.com/naritasfinance t: https://www.twitter.com/naritas Re: Using Land as a 'deposit' on building loan? 3Sep 14, 2016 8:12 pm Rebecca Jarrett-Dalton Property crazy expert mortgage broker, love building new homes! Two Red Shoes mortgage broker http://www.tworedshoes.com.au/building Re: Using Land as a 'deposit' on building loan? 5Feb 13, 2017 1:15 pm firstbuild90 I hope this all make sense. We are FHB. So thinking about buying land outright and that will take up about 85% of our savings. We figure this way we don't have to worry about making loan repayments on the land and will only make repayments on the construction loan. Is it possible to use our land as a "deposit" on the construction loan, instead of paying 20% deposit with our savings? We've been speaking with 3 banks (non-banks) and none have given us a clear indication if that is possible. Our settlement on land is less than 3 weeks from now and we're starting to get anxious. I am a first home buyer and purchased my block of land outright. I went through Yellow Brick Road and they hooked me up with a great loan from Commonwealth Bank. I have a loan for the entire cost of the build. I also explained this to the builder as I did not have the deposit straight away and they were very understanding and waited for the bank to pay the deposit. Any questions, just ask! Building with Long Island Homes 23sq custom build 2017 Re: Using Land as a 'deposit' on building loan? 6Feb 13, 2017 3:25 pm Hi Firstbuild, Just from my experience... you can use the land (just the $ you contributed) as the deposit... There is a waiting period... in my case, the land value was X... loan was Y and my out of pocket was Z (X=Y+Z)... I had to wait for 3 months for $Z to be consider as deposit towards construction loan..... The catch is, if your construction cost is A and your borrowing power is B (Where A is greater than B) then you need to show the shortfall A-B in cash and it can't be asset but if your borrowing power is more than the construction cost, there shouldn't be any issues... Hope this helps! 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 19406 In NSW the maximum deposit for building work is 5% until the builder provides HBCF insurance 1 4910 Broker here - legislation says that every true broker must put the clients best interests before theirs so in theory they must offer you the best options for you on their… 2 46144 |