Tips for buying a house and land package
Steps to buying a house and land package
When you’re looking to buy, asking ‘what is a house and land package and how do they work’ can be important steps in realising your property goals. House and land packages are one of the most affordable and effective ways to enter the property market and are a great way to build the home you have always wanted. Moving from renting to buying a house and land package is a dream come true for many Australians. New houses can also be a great investment, attracting a large range of tenants.
One of the first steps in your journey to buy a home and land package is working out which of the two different kinds you should buy. Mortgage House can help you find a suitable home loan for either.
The first option to consider when you are looking to buy home and land packages is whether you purchase the land before the house is built. If you choose this option you will need two home loans, one for the land and one for the construction of the house. Developers will usually require a deposit of about 10% when you buy the land, but one of the big advantages of buying this way is that you will only pay stamp duty on the purchase of the land, not the house. Another advantage is you can use a construction loan to build your home. The other way is to buy a house with land by purchasing one that is already built on the developer’s block. If you choose this option you may only need a 5% deposit, with the rest payable once the home is completed.
To find out how much your repayments may be when you buy home and land packages, click on our Mortgage Repayment Calculator. All you need to do is enter the information requested and it will give you an indication of what your repayments may be, including how much interest you will pay. That can help you understand what you need to do to move from the treadmill of renting to buying a house and land package.
Important Disclaimer: This information is intended as a guide only. The calculation of fortnightly and weekly instalments varies with the specific loan product. Higher loan repayments will be required on principal and interest loans where the instalment calculation is based on half the monthly payment for a fortnightly payment or a quarter of the monthly payment for a weekly payment. Details of terms and conditions, interest rates, fees and charges are available upon application. Mortgage House's prevailing credit criteria apply. We recommend you seek independent legal and financial advice before proceeding with any loan.
The process of buying a house and land package
When you first look into buying a home and land package, there is a lot to process. How do house and land packages work? Do you pay stamp duty? How easy is it to move from the daily grind of renting to buying a house and land package? Where do I even start?
The best place to start is by narrowing down which areas you would like to live or invest in. There are many companies and house and land packages to look at, and sometimes it can be hard to choose between them.
We can help you find a suitable home loan for your investment. If you are looking to buy a home and land package to live in, then finding the right suburb or town is just as important. Taking into account where you work, and if you are a parent where your children go to school, is a good start.
Once you have narrowed down the areas you think are suitable, take a look at the different kinds of house and land packages available. Real estate comes in all shapes and sizes, and house and land packages are no different. Different developers will sell different home design options, home sizes and land sizes. It all comes down to what you want from your home. Working out how that all fits in within your budget is obviously important, but so is trying before you buy.
Most developers will have display homes in new estates or in a nearby suburb. Display homes allow you to see up close the kind of home you may be interested in, and they can give you an idea of the kind of interior and exterior options that are available. Display homes are also a great chance to speak to a sales consultant and ask them all the questions you have about the process to buy a home and land package.
The foundation of buying home and land packages is finance. Mortgage House has a range of finance options that may suit your goal to buy a house with land. It is common to have two separate kinds of mortgage if you are buying a house and land package. The first is a regular mortgage for the land, for which you will have to pay stamp duty. The second is a home loan to construct your home. Use our Budget Planning Calculator to help you get on track to save for a deposit, or simply keep your finances in check.
Important Disclaimer: This is intended as a guide only. Details of terms and conditions, interest rates, fees and charges are available upon application. Mortgage House's prevailing credit criteria apply. We recommend you seek independent legal and financial advice before proceeding with any loan. The Comparison Rate for each of the home loan products contained in this page is based on a loan of $150,000 over a 25 year term. Fees and charges may be payable.
WARNING: The comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. * This mortgage calculator shows indicative repayments based on 12/26/52 equal repayments for monthly/fortnightly/weekly options.
What questions should you ask when choosing a house and land package?
It’s not unusual to have a lot of questions when you are deciding whether or not to buy a home and land package. Outside of ‘what is a house and land package’, one of the most common is ‘what is included in the cost’. It can be difficult from simply looking at brochures and websites to get a clear picture. Most house and land packages come with a series of inclusions for the quoted price. They will usually centre around a certain type of finishings, fittings and appliances, but may also include colour schemes and flooring choices. If you want extra features or higher grade fittings, you may have to pay more. There may also be a range of everyday items you see in display homes that may surprisingly not be included in the price.
Landscaping, for example, is often not part of the quoted price of a house and land package, and driveways may also be another add-on. All this is important when you are working out how much finance to apply for. Another question to ask that can help you find a suitable home loan when you buy a home and land package is ‘does the developer offer a fixed-price building contract’. Not only can this make it clear what you are getting and how much it will cost, but it will also guard against any unexpected costs or fees. A contract such as this can also help you with your financing options. A good tip is to visit as many display homes as you can to get an idea of what you like, and what the developer can offer you.
‘How long will construction take’ is another common question when you are buying or moving from paying rent to buying a house and land package. When you are buying a house that is already built, settlement contracts are clear and can be negotiated. However, there can be a range of different variables when you buy home and land packages. These can include weather, the complexity of the design and the build, how long councils take to give permits, and how busy the industry or the developer is at any given time. These discussions are ones to have with your builder or developer. When it comes to financing, if you choose a construction loan to build your home, you will have up to 12 months to complete construction after settlement.
Another big question when you are trying to buy a new house with land is how much you can borrow. Mortgage House can help you narrow down or even increase your house and land package options with their Borrowing Calculator. This resource can give you an indication of what you may be approved for before you apply. That can give you a price range to start your house hunting with.
Important Disclaimer: This is intended as a guide only. Details of terms and conditions, interest rates, fees and charges are available upon application. Mortgage House’s prevailing credit criteria apply. Please note that your actual fortnightly repayment would be equal to the monthly repayment amount divided by two. Weekly repayments would equal the monthly repayment amount divided by four. If you choose to pay fortnightly or weekly, your actual repayments will be higher than repayments shown on this page. You can reduce the term of your loan if you choose to make repayments fortnightly or weekly. We recommend you seek independent legal and financial advice before proceeding with any loan.
What to know when buying a house and land package?
Once you have made a decision to buy a home and land package, there are a few things to know which you might be unaware of if you have only bought existing real estate. One tip is to research your location and developer. Find out what experience they have and how long they have been in business. Ask them how many house and land packages they have sold and ask for referrals from their customers. If you are still unsure, ask the owners of their homes whether they are satisfied with their work. Building a home is a big deal, and it’s important to do as much homework as possible. Something a builder or developer should be quick to show you when you ask is their appropriate warranty and insurance cover.
That can protect you if things don’t go as well as planned.
One of the biggest differences when it comes to looking to buy home and land packages is the kind of home loan you can apply for. If you are building a home, a construction loan may be the most suitable option. A construction home loan can give you extra flexibility. A construction home loan allows you to stage the drawdown of parts of your loan, as agreed construction stages are met. While the amount you are approved for doesn’t change, you are only charged interest on the amount you have paid out to your developer or builder. Click on any of our construction home loans below to find out more.