Hi we are using our savings to put a 10% deposit on a block of land that won't settle til mid 2018 -obviously we will keep saving but do we need another deposit for the loan or is the fact we have paid 10% of land count as deposit?
@Corey Batt did my last construction loan, might be worth giving me a buzz to review your situation. Its likely they'll look at what the completed value of the project will be and lend based on that. This then swallows the land loan and any equity you have in the land (from either your deposit or its growth by then) will factor into whether you need to contribute more funds or not.
Hiya It's very important to seek credit advice before committing to a purchase. You can usually borrow the 90% against land - it all depends on your situation and the location of the land. Cheers Jamie
It will count toward your deposit - whether it's enough will depend on a few things like lender policy, location of land and so on. It's also important to make sure you'll be able to service the construction when the time comes, so plan ahead for that.
Some lenders do 95% for land, so wouldn't need any extra deposit. But your much better off getting a building contract as well so the bank can value and lend on the completed project. Also write some conditions into the land contract such as extending the required notice to settle etc. running around with 14 days at the end of 2018 can be pretty stressful.
Yes happens all the time. Most builders will 'fix' the price for a reasonable time (like till 2019), but have clauses the price increases periodically afterwards.
