Construction loan processing

Hi all,


I am going to see my mortgage broker later this week but I would like to know some facts before I see the broker


1)

Deposit: I read articles and forums saying 5% deposit is the minimum and actual deposit requires around 8-9%. I have been looking at land + house around $480,000 and it would be around $40,000 deposit.
The question is that if deposit requirement is $40,000 , is it included FHOG ($10,000) ?
I was wondering 8 - 9% is with FHOG or just genuine saving itself


2)

Also, I was wondering how I show my deposit when I apply for the loan? Do they find out by looking at my bank statement?


3) Finally, I was wondering it is a benefit if I apply for a home loan through the same bank I have been dealing for long?


Thank you very much

 

Hi and welcome to the forum

To answer your questions -

1) 8% is ideal b/c you'll need to add on mortgage insurance. If the total adds up to more than 95%, your rates will be crazy. The FHBG can be used as funds to complete.

2) Yes, they'll need to see a bank statement with savings growing over 3 months with no lump sum deposits.

3) Not in terms of rates or anything like that. In fact could be a disadvantage.

If you're looking to build, with a LVR that high its going to be imperative that you do it as house and land in one go, rather than land and a pre-app for construction.

Vals come in so low at the moment that if you do it separately there's a very real risk the final val will be lower than contract and there's no room to move.

 

Yes the FHOG can be used towards and included in the deposit amount.

 

1 - seems about right due to LMI, however FHOG can only be applied at construction stage ( slab stage) and not be used as part of land (only) settlement.

2- being an LMI deal you'll need to show 5% savings for 3 months via statements.

3- depends who has the better offer.