house & land packages
Buying land and later building on that land with a construction loan is a popular way to buy a new property. On the other hand, house and land packages offer a much less complicated way to get you into your new home.
House and land package loans are bundled together as a deal but the general requirement is that you start your build within two years. You can otherwise apply for a vacant land loan with one lender and construction loan with another, and you would normally do this if you don’t plan to build on the land for more than two years.
A house and land package generally incudes everything you need to move straight in, including:
The complete cost of the land and build is set out in a standard sale and purchase agreement between you and the builder. You will typically have to pay a 10% deposit at the point of signing the contract with the balance being payable at completion of the build process, or at various stages. In order for the remaining funds to be released to the builder, the house must be fully completed at various stages, and you ready to move in after the local council has granted you the relevant certificates.
The big benefit for many first home buyers is the fact that you usually only start making your mortgage repayments once the property is complete and your home loan is settled. You won’t have to contend with making progress payments while trying to pay rent. You may also be able to claim a stamp duty concession.
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