28 Mar 2022

Can You Get a Loan to Buy Land and Build a House at the Same Time?

Buy Land and Build a House Financing

Individuals who seek to build a home as an owner-builder or investor must purchase the land before they start the project. If the owner-builder or investor enters the project with too much debt, it raises red flags for lenders. Construction loans have a short period. Since it takes six to 12 months to build a home in Australia, the loan period only lasts up to one year. 

In addition, most lenders only finance a 50% land-to-value ratio. Therefore, the individual must enter the project with Applicants who qualify for land and home packages often enter the deal with financing from other sources. Otherwise, they buy land first. Then, they build on it. 

Mortgage House remains an innovator in the lending industry. Our loan specialists have the tools to evaluate land and home projects. It’s possible to find a compromise and favourable loan terms. Construction financing works differently from mortgages for residential property purchases. Lenders release construction financing in increments. Therefore, applicants do not receive the full amount in one lump sum. Moreover, the crew who builds the home receives the funds. 

Loan specialists at Mortgage House can provide more details and requirements for the financing to owner-builders and investors. 

Check out our mortgage repayment calculator for free online.

Buy Land and Build a House Financing Conclusion

Those who seek to buy land and build a home on it must pay off the land first if they obtain financing. Mortgage House will consider a home and land loan package. However, the financing will release in increments. To learn more about financing this project, contact our loan specialists.

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