What is a land loan?
Land loan – the borrower receives a loan from the lender for the purchase of vacant land. The buyer purchases the land with the sole purpose of gaining land ownership.
Land loan – the borrower receives a loan from the lender for the purchase of vacant land. The buyer purchases the land with the sole purpose of gaining land ownership.
The price of the land is crucial because it will determine the deposit you will need to have for the purchase of land. The limit of borrowing will depend on the lender based on the size and price of the land.
Having an immediate intention to build can aid you in securing the loan for land. Lenders see this as a low risk than someone planning to build in the upcoming years of owning the land.
Lenders will review your income and employment history to ensure you're able to repay the loan with the interest amount.
To get a land loan, you will need to use the land for investment or owner-occupied purposes only. You can't use the land for farming or other activities.
This package comes in two distant combinations. The first option usually offers a ‘turnkey home’ on a particular block of land. The second option gives you the flexibility of buying the vacant block of land and then building your home with selected builders and designs.
The primary advantage of a house and land package is that it provides you with the alternative to customize your dream home construction to your preferences. Furthermore, you will be buying the house and the land from the same seller- so the process will be more efficient and effective.
Another advantage is that this package is a cost-effective option because it saves your money on stamp duty. The stamp duty will be paid on the vacant of land and not on the construction value. To avoid any hidden expenses, please request your builder for a precise breakdown of the quoted price.
Under the Home Guarantee Scheme, a first home buyer looking for buying land can acquire a modest home with a minimum of 5% deposit.
You can either purchase a house and land package scheme or buy a land and later a construction contract to be eligible for one out of the 10,000 places in the above scheme. Please note that you must start the home construction within six months of signing the contract, finish the building by 24 months and reside in the property within six months before the occupancy certificate is issued.
Vacant land loans are a specialized form of financing intended for the acquisition of land. Unlike conventional home mortgages, these loans cater specifically to properties that lack substantial buildings or structures. This financing option enables you to purchase a piece of land with plans to construct a residence or undertake development at a later stage..
Individuals often pursue vacant land loans for various purposes:
Yes, if you are purchasing land without a building contract, you are eligible to apply for a standard home loan. Once you are prepared to commence construction, please contact us for assistance. In the case of acquiring a house and land package, a construction loan is available. The initial drawdown will be allocated for the land purchase, followed by subsequent drawdowns to finance the various stages of construction.
The timeframe for obtaining approval for a vacant land loan can differ depending on the lender and the intricacy of your application. Typically, this process may take few days to weeks depending on the Lender assessment timeframe. Having all necessary documentation in order and presenting a well-defined plan for the land can facilitate a quicker approval.
At Credific Finance, our knowledgeable mortgage brokers are there to assist you for the land and construction loan and help you with your construction loan application when you are prepared to begin your project. You can choose to merge the two loans into a single loan or maintain them as separate entities.
