I had this idea which may or may not work for new home buyers trying to get into the market.
In NSW first home buyers building a new property under $550,000 get stamp duty exemption and a $15,000 grant.
If you had $5,000 saved could you use that to buy a $100,000 block of land and then use the $15,000 First Home Buyers Grant to get finance for a house to be built (assuming a cost of $280-300,000)?
I would assume you would buy the land first and then go for the construction loan 3 months or so after purchasing.
Please pick it apart and tell me the flaws, but better yet tell me how it could work (if there is a way it or something similar could work)
Ryan McLean | On Property
http://onproperty.com.au
Email MeNice one Ryan
Pretty sure a build stays on variable rate during construction and cannot be put onto a fixed rate until construction is finished, but that shouldn't be a major issue.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Hi Ryan,
Not a broker so take what I say with a grain of salt. A couple of questions/comments.
1. Will banks do 95% lend on vacant land? When I last looked this rarely (if ever) happened as banks generally consider vacant land as greater risk.
2. With NCCP coming on board banks steer clear of high LVRs to people without genuine savings. Simply using a FHOG as deposit isn't likely to be a successful approach at this time. They used to do this with Rudd's FHOG Boost scheme but the wheels have fallen off quite a few of those mortgages. Banks being risk averse have reined in lending to people without genuine savings.
Now I'll leave it to one of the resident brokers to tell me I am wrong.
Yeh I thought so. I haven't taken an indepth look into banks lending habits on land or construction. I have heard of a few people getting 95% loans on house/land packages.
I had heard that once you have money in your bank account for 3 months banks count it as 'genuine savings' so I wondering if after you purchased the land and got the $15,000 grant…if you then held onto that in your savings account for 3 months it could sneakily be counted as genuine savings.
However, I highly doubt this would work. But thought it would be good to get everyone's feedback. I'm always trying to think of ways to do things for a little money down as possible. There are a lot of people out there who can't save a deposit but can afford repayments.
Ryan McLean | On Property
http://onproperty.com.au
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