Hopefully some mortgage brokers of finance people can clear this up for me………
I am looking at an ‘off the plan’ townhouse that is being sold as a house and land package. This is in a development of 15 properties.
They require periodic payments for the building component of the package.
The house and land package allows me to save around 60% in stampduty.
However, the agent has told me that the arrangement is that you obtain the one loan for both components and the bank will release money to the builder as they require it. The land component isn’t paid until completion.
Does this sound legit????
Why would a bank lend you money for building a house on property that you do not yet own?
I have never looked at house and land packages before and am unaware if this is common.
Thanks,
Simon.
Simon,
It sounds like the developer is passing on the building costs, and therefore also the building risk, to you. I would want a massive discount to agree to something like that.
Regards
AlistairSimon
I have come across this with developers trying to finance their projects out of purchaser funding but you will not find any lender release stage payments with the security of the land.
As A Perry has pointed out I would want an enormous discount if ever contimplated doing something like this which by the way I wouldn’t.
Who is to say the builder is not a $2 Company.
Cheers Richard
Ph: 07 3720 1888
[email protected]
http://www.yourstatefinance.comSpecialising in US & IP finance.
Richard Taylor | Australia's leading private lender
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