Bought off the plan land in 2014 for $675k. Land is now titled, and settlement is due in 2 weeks time. And I just lodge finance application today with westpac...yes i know, my bad Got a builder quote for $420k, and I got the plans. But the earliest colour selection appointment is in 2 weeks time. Houses in the area sold around $1.2-$1.5 mill. Hoping that I could borrow 80% of the market price. Should I get a building contract in order to get 80% of the market price? If I cannot get the building contract in time, can I just give the plans and the quote? Please advise what's the best thing I need to do. This would be an investment property btw.
You need to settle on the land first and the apply for the construction loan - or could settle with a pre-approval for the construction.
Thanks for your prompt reply. Can I get 80% of the market value if I settle on the land? How will it work? Let say market value is $1,200,000. I heard that they will not do valuation on the land only. Is that right? So I need to apply for $540k loan (80% of $675k) on the land first, then construction loan could be $420k (full amount of the building contract price)?
Get a loan for 80% of the land and settle. When you have the full build contract, get a val done on that and borrow up to 80% of that 'end' value.
I would be looking to order a land plus construction with a couple of different valuers. If you have a building tender, DA and plans then you can order the construction valuation. No point in going with lender A for the land if lender B is going to give you a better valuation on the land plus construction.
The issue is timing. It's pretty rare for a builder to be able to prep contracts within 2 weeks. You then need time for the valuer. If you do end up changing lenders after land settlement it's not a great cost, but it can be a hassle paperwork wise.
