Looking for a 20 acre vacant land loan

Any general questions you might have in regards to loans and finance.
Makaveli
Posts: 3
Joined: Thu Jul 04, 2019 5:56 pm

Looking for a 20 acre vacant land loan

Postby Makaveli » Thu Jul 04, 2019 5:58 pm

Hi, my husband and I are looking to purchase a 20-acre vacant land that we want to use as a hobby farm/lifestyle block for five to six years and then build on the property. We applied with a bank but they want to see building permit and plans before approving our loan which we don’t plan on starting for at least 5 years. Our combined income of $120k plus super with no dependents is more than enough to service the loan.
Is there a lender that can approve us?

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Otto Dargan
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Re: Looking for a 20 acre vacant land loan

Postby Otto Dargan » Thu Jul 04, 2019 6:45 pm

Hello Makaveli. Welcome to the forums.

Yes, for a 20-acre vacant land loan, there are few lenders on our panel that can lend:
  • Up to 95% of the property value for vacant land less than 11 hectares (27.2 acres).
  • Up to 100% of the property value with a guarantor loan which is available with select lenders.

Banks are typically conservative when assessing vacant land loans as the marketability of the property is limited. They are also wary of property speculating investing. Whereas, if there is a house on the land, then the approval process is much simpler.

Apart from land size, each lender has its own requirements such as:
  • Utility requirement: Most require electricity and town water. Some accepted bore or tank water, solar panels etc.
  • Access requirement: Has to have a sealed or gravel road access to the property.
  • Zoning: For most the zoning has to zoned residential, rural residential or rural. Other zones such as mixed-use zones are considered on a case by case basis.
  • Postcode: Each lender has its own postcode restriction.
  • Intention to build: If you’re not planning on building in a year or less, lenders may consider it speculative investing and decline your loan.

Give us a call on 1300 889 743 or fill in our free assessment form to find out if you qualify for a vacant land loan.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Makaveli
Posts: 3
Joined: Thu Jul 04, 2019 5:56 pm

Re: Looking for a 20 acre vacant land loan

Postby Makaveli » Thu Jul 04, 2019 7:13 pm

You’ve got great information on the page. I don’t see any other issue apart from the location of the property which is postcode 2580 near Goulburn.

How much will I be able to borrow in this postcode? Your calculator just says medium risk.

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Otto Dargan
Mortgage Specialist
Posts: 7528
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
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Re: Looking for a 20 acre vacant land loan

Postby Otto Dargan » Thu Jul 04, 2019 7:44 pm

Hi Makaveli,

The postcode 2580 is considered a medium risk location. It means that depending on the lender’s policy they may accept it or not. Typically, lenders are willing to lend up to 70%-80% of the property price so, you’ll require 20%-30% as a deposit plus costs involved to complete the purchase.

One of our lenders has no postcode restriction and will assess every loan on a case by case basis.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Makaveli
Posts: 3
Joined: Thu Jul 04, 2019 5:56 pm

Re: Looking for a 20 acre vacant land loan

Postby Makaveli » Thu Jul 04, 2019 9:57 pm

As I mentioned in my initial questions, it will be developed into a self-sufficient lifestyle block. I grew up around farms so I plan to run a few heads of cattle, horses etc. Am I looking at paying a higher interest rate because it’s a vacant land loan? Will my application be assessed as a vacant land loan or a hobby farm? Does it matter?

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Otto Dargan
Mortgage Specialist
Posts: 7528
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: Looking for a 20 acre vacant land loan

Postby Otto Dargan » Thu Jul 04, 2019 10:20 pm

Hi Makaveli,

Not necessarily, if the property location and the security itself is acceptable to lenders, you’re looking at paying the same interest applicable as those buying an established property.

You can check out the best interest rate offers from our panel of lenders. Currently, interest rates are at record lows with RBA’s back to back cash rate cuts. The key is to apply with the right lender to take advantage of historically low rates.

Speak with one of our specialist mortgage brokers by giving us a call on 1300 889 743 or fill in our free assessment form to find out if you qualify for a vacant land loan with competitive interest rates.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts


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