Finance for vacant land

Discussion in 'Loans & Mortgage Brokers' started by couq, 12th Apr, 2017.

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  1. couq

    couq Well-Known Member

    Joined:
    19th Sep, 2016
    Posts:
    279
    Location:
    Melbourne, Australia
    Hi all,

    What is the process for buying vacant land (ie a subdivided block with just the land) and getting finance approval. Obviously there will be no rental income included but is it more difficult to say get a loan for $250000 then to build for $250000 vs. buying a existing house and land at $500,000.

    What is the process to getting a building and plans sorted to build and rough timelines for holding costs.

    Thanks in advance
     
  2. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

    Joined:
    18th Jun, 2015
    Posts:
    3,977
    Location:
    Canberra, Brisbane and Sunshine Coast
    Generally the same process and policies. The big banks generally don't treat vacant land differently from houses/units - same LVRs, etc apply

    Cheers

    Jamie
     
  3. Simon Moore

    Simon Moore Residential & Commercial Mortgage Broker Business Member

    Joined:
    4th Mar, 2016
    Posts:
    556
    Location:
    Level 2 287 Collins St Melbourne VIC 3000
    Some of the banks don't factor in the effect of gearing for vacant land purchased as an investment.

    Regarding time frame, this will depend largely on the council and if you want to push the limits with your construction. I would have a chat with a local town planner, they should be able to give you the lay of the land.