Buying land and building loan question

Hi

I seen some land that i would like to buy now which will have titles come out in November and i would like to start a build on it soon after.

My question is how do i go about the loan on this?

I currently have a house i own which i will be selling very soon and going into a rental to help finance the new build and also currently have a 20% deposit for the new land.

Thanks for your help

 

Like normal

Apply to settle on the land and then get a builders contract and apply for the build portion.

 

If possible - you'll want to try get the construction package in the finance application normally at the same time, this means it can all be approved at the same time and not require two applications. Likewise it stops silly issues like the land being valued differently when applying for construction and having a shortfall issue etc.

With this timeframe though it's unlikely a builder would have all the contracts, plans and specs, building approvals in time for finance to be applied for and finalised before settlement.

 

This is a standard H&L finance - its a pretty simple credit application.

Like Corey said - preference is to have the build contract ready before land settlement time. This avoids a few potential hiccups and the need for two sets of credit approvals and finance docs.

If its not possible, settle on the land first (land loan) & then apply for a construction loan on top once the build contract is ready.

If its being built to be a rental property - lenders will include the rental income post construction into servicing. There'll be progress payments that are paid to the builder as they complete more and more of the build (standard build contracts have this in place).

 

Don't settle the land first. Get approved on the house and land together. The approval might be subject to sale, and might be subject to val, as valuers won't do their valuation report until the land is ready.

 

Thanks for all your help