Vacant Land Loan

Any general questions you might have in regards to loans and finance.
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Joined: Wed Mar 31, 2010 8:37 am

Vacant Land Loan

Postby nork » Wed Mar 31, 2010 8:46 am


We are currently looking at purchasing vacant land with the view to building in 12-24months time. Combined income is $97k pa we have a car loan with approximatley 9 months payment left $280 per month and no other debts or credit cards. We have a 25% deposit and a good savings history. I have been at my current employer for 5 years and my partner 2.5 years. Only catch is that I have on my credit file a Part IX debt agreement which was paid in full 4 years ago, this will be taken off my credit file at the end of September this year, I have no other defaults or enquiries on my file and my partner has a clean credit file. Will this impair our ability to get finance? And will we be limited to a non conforming loan despite all of the above? I am just wondering if any of the big banks will take any of this into consideration and offer us finance?

Thanks in advance

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Otto Dargan
Mortgage Specialist
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Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia

Re: Vacant Land Loan

Postby Otto Dargan » Wed Mar 31, 2010 11:20 am

We may be able to get your loan with a major lender even though you have been in a Part IX debt agreement. In these kinds of situations I really can't make any promises except that we will do our best to help!

For the land loan I expect as long as the security is relatively easy to sell (i.e. land under 2.2 ha, in a major regional centre or capital city) then it may be possible for you to borrow 80% of the land value.

Unfortunately in this type of situation there is no guarantee the lender will later approve the construction loan when you apply for it. In some cases they may want to see a 6 month payment history before they allow you to increase the loan for construction. If you only need to borrow 80% of the cost of construction then I believe you have a good chance of approval.

What will the lender be looking for?

* Did you save the deposit yourselves or was it a gift / from another source?
* The saleability of the land.
* Have you paid your rent on time at the moment, what have your payments been like on your car loan?

I hope that helps. If you would like to speak to a specialist in non-conforming then give us a call on 1300 889 743. We'll do what we can to try to help you get a loan with a major bank.

Otto Dargan
Mortgage Broker
P | 1300 889 743
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