Loan for 5 acre block

Looking to buy a 5 acre block 60kms from major city.

Would this just be a standard loan or does it come under a rural lend? Are there only certain lenders in this space?

Looking to eventually build PPOR and would have 20% deposit.

 

Standard usually. Rural residential?

 

A normal 80LVR lend should be no drama, things to watch for.....

Access - would need to be a lot that has access from a public road
Would need to have dwelling entitlement
Make sure you do not need to use/have rental to get loan

So, essentially if it is a block for residential purposes, probably good in most spots, if it is a crappy old farm lot that has no rights or uses apart from farming, then it will not come under normal home lending.

Also, look at what services etc are there, if it has no services, it may not be liked either & for yourself, be aware of what it costs if no power close, or transformers are too small, and septics and water collection and related systems are needed.

 

Where are you looking? If you let us know the suburb we can be a bit more helpful. 5 acres shouldn't be an issue with most lenders but the postcode may be.

 

Agree with Rolf - it's location specific.

Having said that - 5 acres is reasonably small. Recently financed a 500 acre+ bush block with dwelling....that was a lot of fun.

Cheers

Jamie

 

My PPOR purchase was a bit of a challenge, my zoning is primary production but rates notice shows it as residential without primary production (ie lifestyle). Lender kept going back to my broker and saying it was a commercial lend due to zoning, and could not get their heads around there being large farmland and small lifestyle in same zoning area.

Eventually got it through their heads and they did it as resi, but then due to no comparables ended up at 60% LVR.

 

The main factors which determine rural lending are:

• size of the land being purchased
• what utilities are connected to the property - electricity, water supply, sewer
• Is there a house or ability to build
• zoning of the property

Overall its possible to go up to a couple hundred acres if all the other factors are there - but it really depends on all of those points together. If the property has utilities connected, not in Timbuktu and not zoned primary production only then you will have a few mainstream options available. NOTE: not all lenders take these types of properties as acceptable security - so always bets to speak to your broker before signing a contract to ensure you have sufficient deposit funds/borrowing capacity with the lenders needed.

 

Thanks for the comments.

I'm looking at the Bullsbrook/Lower Chittering area here in Perth. Most of the lots have services to the boundary. I'd be able to put 20% down.

 

That should be fine - just check with your broker to make sure your servicing fits with the lenders who are happy to take this type of security on. Bullsbrook/LC is a stones throw from metro Perth.