questions regarding first mortgage

Any general questions you might have in regards to loans and finance.
distinctly
Posts: 1
Joined: Mon Sep 02, 2019 8:41 pm

questions regarding first mortgage

Postby distinctly » Mon Sep 02, 2019 8:48 pm

My partner and I are FHO's looking to start building our first house in NSW before the end of year . We have found a block of land for 299k that fits the house we want to build 320k on that block, making our total around 620k.
The block of land is registered and for sale through a real estate.
I currently have 37k for deposit which is 12% of land cost/ 6% of total cost (not including the FHOG which would take it to 15%/7.5% respectively).
My partner has virtually no savings and just recently started a full time job last week after working as a freelancer for the past year. Our combined salary is over 160k.

My questions are as follows

As my partner is only new to full time work, how long would we have to wait for the lender to consider her salary?
Would I be better applying for the land loan now by myself with my 37k and then applying for a separate loan for the house with my partner at the end of the year?
Would we stand a chance of getting approved for the entire amount now?
Are we better off saving until the end of year and having 50k deposit (8% of total or 9.6% including FHOG) but most definitely missing out on the block of land we love?

help is much appreciated.

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Otto Dargan
Mortgage Specialist
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Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
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Re: questions regarding first mortgage

Postby Otto Dargan » Tue Sep 03, 2019 9:36 pm

Hi Distinctly. Welcome to the forum.

  • Most banks require applicants to be in the current position for a minimum of 6 to 12 months. However, a couple of our lenders can allow you to borrow up to 95% of the property value, even if you or your partner just started a new job. So, yes, it’s possible to use her income. We may require an employment letter as evidence.
  • Yes, if you can service the loan you can apply for the land loan by yourself.
  • We would have to do a full assessment of your borrowing power to find out if you can get approved for the full amount now. You can use our ‘borrowing calculator’ to get an estimate.
  • You can buy the block of land now and continue to save and build up equity in the land to construct later. Constructions loans are always tricky and most people go over budget!
If you’re buying the land, you should split the loan into a “land loan” and “construction loan”, which means that they’ll be advanced at different times. If this isn’t done then you’ll need to put all of your required funds in at the time the land settles. The LMI (lenders mortgage insurance if applicable) will be charged at land settlement.

You can borrow the full costs of construction and land if your parents are happy to act as guarantors on your construction loan.

Your mortgage broker will discuss this with the lender to confirm their process and find out when you’ll be required to contribute your deposit.

Please speak with one of our specialist mortgage brokers today by giving us a call on 1300 889 743 or fill in our online assessment form today to discuss your options.
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts


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