Browse Forums Building A New House Re: Land loan & construction loan 10Mar 20, 2017 7:38 pm dougang287 We did land and then construction once we sorted a builder and was told it would be interest only until we moved in as we are renting but it's not. Went through NAB and wouldn't recommend them at all. If I had seen the reviews online I would never ever gone with them. Stay clear! We got mucked around for six weeks where I had to constantly ask what was happening as the communication was so poor. With you on this. NAB, whilst overall a good bank was a bit of a nightmare to deal with. In our case separate land and interest only build loans, which rolled into one 12 months after the build process first started. First issue we had was the builders payment schedule didn't suit the bank, so had to get builder to change that. Mind you this was done after we had already commited, but before loans were signed, and to back and forth almost cost us the land and build deposit. Last payment was also a bit touch and go, though in this case I blame the builder for not allowing enough time for the bank to do what they need to do, but in the end got there. The weird one was the combining of the loans. As we had sold another house we wanted to sort it all out more or less once construction ended, but the build loan still had 3 months of interest only. The thing was to combine them early meant applying for a new loan, or waiting 3 months when it was then possible. Also once our old house was sold the excess money we had was not offset against the land loan properly, so we had $300k in cash, $300k in land loan but still paying interest. Though must admit NAB were good in repaying the interst we would have not paid had the offset been done the way we instructed. Easily proved as the instructions were in email. I built in 2000 using Bank West (prior to their take over by Com Bank) and they were much easier to deal with that's for sure. Re: Land loan & construction loan 11Mar 20, 2017 7:49 pm AJW dougang287 We did land and then construction once we sorted a builder and was told it would be interest only until we moved in as we are renting but it's not. Went through NAB and wouldn't recommend them at all. If I had seen the reviews online I would never ever gone with them. Stay clear! We got mucked around for six weeks where I had to constantly ask what was happening as the communication was so poor. With you on this. NAB, whilst overall a good bank was a bit of a nightmare to deal with. In our case separate land and interest only build loans, which rolled into one 12 months after the build process first started. First issue we had was the builders payment schedule didn't suit the bank, so had to get builder to change that. Mind you this was done after we had already commited, but before loans were signed, and to back and forth almost cost us the land and build deposit. Last payment was also a bit touch and go, though in this case I blame the builder for not allowing enough time for the bank to do what they need to do, but in the end got there. The weird one was the combining of the loans. As we had sold another house we wanted to sort it all out more or less once construction ended, but the build loan still had 3 months of interest only. The thing was to combine them early meant applying for a new loan, or waiting 3 months when it was then possible. Also once our old house was sold the excess money we had was not offset against the land loan properly, so we had $300k in cash, $300k in land loan but still paying interest. Though must admit NAB were good in repaying the interst we would have not paid had the offset been done the way we instructed. Easily proved as the instructions were in email. I built in 2000 using Bank West (prior to their take over by Com Bank) and they were much easier to deal with that's for sure. Re: Land loan & construction loan 12Mar 20, 2017 7:59 pm dougang287 AJW dougang287 We did land and then construction once we sorted a builder and was told it would be interest only until we moved in as we are renting but it's not. Went through NAB and wouldn't recommend them at all. If I had seen the reviews online I would never ever gone with them. Stay clear! We got mucked around for six weeks where I had to constantly ask what was happening as the communication was so poor. With you on this. NAB, whilst overall a good bank was a bit of a nightmare to deal with. In our case separate land and interest only build loans, which rolled into one 12 months after the build process first started. First issue we had was the builders payment schedule didn't suit the bank, so had to get builder to change that. Mind you this was done after we had already commited, but before loans were signed, and to back and forth almost cost us the land and build deposit. Last payment was also a bit touch and go, though in this case I blame the builder for not allowing enough time for the bank to do what they need to do, but in the end got there. The weird one was the combining of the loans. As we had sold another house we wanted to sort it all out more or less once construction ended, but the build loan still had 3 months of interest only. The thing was to combine them early meant applying for a new loan, or waiting 3 months when it was then possible. Also once our old house was sold the excess money we had was not offset against the land loan properly, so we had $300k in cash, $300k in land loan but still paying interest. Though must admit NAB were good in repaying the interst we would have not paid had the offset been done the way we instructed. Easily proved as the instructions were in email. I built in 2000 using Bank West (prior to their take over by Com Bank) and they were much easier to deal with that's for sure. god now I'm not looking forward to combining the loans - another hassle! Well if you let it go it happens automatically. In our case we wanted to speed it up by a few months. In end easier to let it run it's course. Re: Land loan & construction loan 13Mar 21, 2017 6:01 am We also did a separate land loan to construction loan. We couldn't afford to build at the time, however we found a block of land for an unbeatable price. With the prices just going up and up we decided to buy the land. Our land was 6 months late on titles, so we have only had the land loan for 5 months. We are now applying for a construction loan. Only negative was that the rates offered to us were not very good for a land only loan. Also, some lenders wanted a huge deposit. We went with Westpac as they were happy to only take a 10% deposit. Some lenders wanted up to 30%. Re: Land loan & construction loan 14Apr 03, 2017 1:56 pm nicolawhitelaw We did a land loan and construction loan separate. Process was easy for us. We went with the Newcastle Permanent. The reason why we chose the loans separate is because we wanted to settle on the land and we hadn't 100% confirmed our plans with our builder. So decided to settle on the land and fix our home loan rate. Then did a construction loan a couple of months later. Only slight annoying thing was that when we applied for the construction loan after settlement of the land, the LMI hadn't been received on QBE's end from our lender (even tho we paid it on settlement) as the Perm do 2 batch payments a month with other people's LMI so we had to wait 2 weeks for the payment to go through as the calculations were including both payments of LMI if that makes sense. Building with Perry homes: viewtopic.php?t=84756 Do you mind me asking what rate Newcastle permanent gave you - my broker has only put forward NAB and Suncorp for our build loan, and they are significantly more expensive than our current ING loan. Re: Land loan & construction loan 15Apr 12, 2017 7:55 pm candiceb nicolawhitelaw We did a land loan and construction loan separate. Process was easy for us. We went with the Newcastle Permanent. The reason why we chose the loans separate is because we wanted to settle on the land and we hadn't 100% confirmed our plans with our builder. So decided to settle on the land and fix our home loan rate. Then did a construction loan a couple of months later. Only slight annoying thing was that when we applied for the construction loan after settlement of the land, the LMI hadn't been received on QBE's end from our lender (even tho we paid it on settlement) as the Perm do 2 batch payments a month with other people's LMI so we had to wait 2 weeks for the payment to go through as the calculations were including both payments of LMI if that makes sense. Building with Perry homes: viewtopic.php?t=84756 Do you mind me asking what rate Newcastle permanent gave you - my broker has only put forward NAB and Suncorp for our build loan, and they are significantly more expensive than our current ING loan. Sorry late reply. 3.84% variable Building with Perry homes: http://forum.homeone.com.au/viewtopic.php?t=84756 Re: Land loan & construction loan 17Apr 26, 2017 1:18 pm This is all very useful information as I'm heading down this track over the next 2 years. When it comes to a construction loan, whats expected financially upfront for a deposit? I feel this will me the major mood killer in making this work efficiently I have a minimum of 12 months till settlement, a further 12 months to start the build and 24 months in total from settlement to when we need to be residents Re: Land loan & construction loan 18Apr 26, 2017 2:38 pm Hello, Similar experience to those above. We were never expecting to build but found a good block in Albury for 146k. Didn't want to rush the build process so we got a land loan through a broker (ANZ 4.03%). We put down a 10% deposit but ANZ and NAB asked for 5%, perhaps considering our savings history and no other debt. When construction starts next month or so our construction and land loan will combine, still at 4.03% and we will pay interest only till completion. To complete the build ANZ has asked for another 5% of the build price, however we will put down about 12%. Hope that helps happy to answer other questions. Re: Land loan & construction loan 19Apr 26, 2017 2:53 pm In our case we put all we wanted to contribute into the land loan to keep it as small as possible and avoid LMI. Then when it came time for the construction loan we used the equity in the land as the deposit. Anything we saved in the meantime we held on to for post handover things. 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 20093 Hi there, I hope someone can give me some insight into a (very lucky) situation I'm dealing with. My Mum was gifted property by my grandfather after he passed. My… 0 746 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 5652 |