First Home Buyer - Property to Settle

ozbargainer86 on 05/12/2018 - 14:04

Hi Guys

I need an opinion from you all smart ozbargainers.

I am first home buyer. I have already purchased property (new House & Land Package) back in December 2017. As I am at the verge of settle the land in Jan 2019.

I am into market looking for pre-approval loan of my land and construction. I have already paid deposit 10% to land developer and builder.

Please advise me any home loan deals that worth looking and things that I must look before signing on dotted line.

Also which home loan product would be the best in long run i.e. offset and without offset.

I would greatly appreciate you guys.

Thanks

Poll Options expired

  • 1
    Non-Split
  • 2
    Without Offset
  • 2
    2 years Fix
  • 2
    3 years Fix
  • 3
    5 years Fix
  • 5
    Split
  • 20
    Offset
Financial

Comments

  • redfox1200 on 05/12/2018 - 14:17
    +3

    offset with 80% fixed for the longest time you can find under 4% interest

    • ozbargainer86 on 05/12/2018 - 14:23

      you mean 5 years fix.

    • donotuse on 15/12/2018 - 17:18

      I'm not a big fan of Fixed rate loans because the economy is going nowhere for rates to rise, and that you can't offset a fixed rate loan. I was able to fully offset my HL in less than 4 yrs, it would have been devastating if my HL was fixed as I would have parked my money in a lower interest deposit that's taxable too.

  • onetwothreefour on 05/12/2018 - 14:18

    Have you done any research of your own?

    • ozbargainer86 on 05/12/2018 - 14:21
      -1

      Yes I did on canstar. but too many products makes it difficult to decide.

  • mbck on 05/12/2018 - 14:19
    +5

    All on black

  • [Deactivated] on 05/12/2018 - 14:21
    +1

    You would have to customize based on your personal situation. If you are a good saver go for the Offset! On a similar note, pay for everything using a credit card (provided no CC transaction fee) during the interest free period, while your income sits in the offset account reducing the interest payable.

    • ozbargainer86 on 05/12/2018 - 14:25

      Are you talking about Balance Transfer ?

      • [Deactivated] on 05/12/2018 - 14:31
        +2

        No. Most credit cards have 30-50 days interest free periods. Just pay your CC bill in full JUST before the due date, while the few thousand dollars (if you spend that much per month) sits in your offset account, reducing the interest payable on the home loan for the maximum time possible.

        • Baysew on 05/12/2018 - 15:08
          +2

          Also partner should have a credit card as well, so one card cycles in middle of month and other at end. Time purchases on the appropriate card to max out interest free period.

  • tsunamisurfer on 05/12/2018 - 14:34
    +13

    So in the 1 year since Dec 2017 you have made no inroads into getting finance for your purchase.

    And now settlement is less than 1 month away you are asking Ozbargain whether you should go offset or non-offset.

    Can I put it to you sir that you are running out of time to get finance and meet your settlement timeframes?

    • [Deactivated] on 05/12/2018 - 14:37

      It is true, not to mention bank admin staff make so many admin mistakes along that way, to the point the process gets delayed, and you become liable to pay penalties to the vendor.

      • ozbargainer86 on 05/12/2018 - 14:43

        They have given many dates in the past but they were kept delaying in settlement - there was no definite date. As pre-approval valid only for 3 months, therefore there was no point going for finances. Now they are confident they will do becasue they have to settle within 12 months from the date of my contract. Otherwise I have an option to cancel the contract.

        • [Deactivated] on 05/12/2018 - 14:48
          +1

          Its not personal, because I have been through this many times, and none went smoothly at all.
          Also remember if you settle in Jan, some employees will be on leave, and your files will just sit in a pile somewhere until you complain.
          You will feel like a production manager in this process, even with a solicitor, because if you dont push or ask for status, nothing moves. Just some personal advice.
          For the contract to be cancelled for the sale, developers would love you do to that, so they can sell it to the next person at a higher price.

          • ozbargainer86 on 05/12/2018 - 14:52

            @[Deactivated]: How they can sell to someone at higher price as property prices are falling.

            • [Deactivated] on 05/12/2018 - 15:00

              @ozbargainer86: This is just general comments. So many other factors, being that contract was signed a year as well, and being a new property, it's open to overseas Chinese buyers too. Generally, if a contract is signed on a new development, sunset clauses option usually kicks in about 3 years later, depending on contract, or developers are happy for you to leave just before settlement if they know they can get a better price. Otherwise in a falling market, they do anything to make you hurry up and pay.

        • cloudy on 05/12/2018 - 15:45

          And if you cancel your contract I assume you lose deposit and stamp duty paid?

          Maybe check much the property is still worth, given falling house prices it’s possible the remaining amount to be paid is still more than the property is worth, if this is the case you even have leverage over the developer, say all the things are tough in life and it’s hard to get finance etc etc, and push hard for time or discount or anything from a free upgrade to solar panels or a new car. You’d be surprised how desperate they can be given its well known how tough the property market is right now.

    • chumlee on 05/12/2018 - 14:39
      +5

      Yeah good luck to OP in getting a lender to get themselves organised to settle in Jan. takes them at least a month to get their crap together and this is the silly season

    • donotuse on 15/12/2018 - 17:19

      Ge a broker quick!

  • daewoo on 05/12/2018 - 14:41
    -1

    If you've paid a 10% deposit in 2017 (and the market has crashed a comparable amount in Sydney/Melbourne this past year), PLUS you aren't even pre-approved, you might be better off running from the purchase.

    Consider how much you'd get for the place if you were to sell it used (post agent fees etc). Have you paid stamp duty etc yet?

  • Typical16-bitEnjoyer on 05/12/2018 - 14:56
    +3

    I suspect there may be some sort of profession that involves brokering mortgage deals.

    Can't quite put my finger on it…

    • Baysew on 05/12/2018 - 15:05

      There has been a few fingers pointing at that profession as well.

    • 87percent on 05/12/2018 - 15:10

      Ozbargain mod?

  • QW3RTY on 05/12/2018 - 15:04
    +4

    I would get onto a mortgage broker this afternoon and start making as much progress as possible. Irrespective of how you want to structure it. Lending restrictions have been tightened up significantly in the last 12 months and getting a mortgage is not exactly a two week feat. Most banks will have their corporate branches closed for 2 weeks over Christmas and nothing's getting done in that period. Don't want to miss the deadline and end up losing your deposit when you had over a year to sort this out.

  • 87percent on 05/12/2018 - 15:12

    You better hope and pray you still qualify for your loan. I was speaking to my mortgage broker the other day, and he mentioned that banks are tightening their loan qualifications and people that were approved last year, are being denied this year

    • ozbargainer86 on 05/12/2018 - 15:21

      Well I already had few meetings with CBA home loan specialist. He knows about my situation and said I will be fine. Fingers cross

      • Baysew on 05/12/2018 - 16:48
        +2

        In the series of Famous Last Words -

        He knows about my situation and said I will be fine.

  • pantsparty on 05/12/2018 - 15:29
    +1

    This is a very vague question and really depends on your personal financial situation. Having paid a 10% deposit is great - how much more money do you have saved to put down as a deposit? To get one of the better low interest rate deals around you will need more than a 10% deposit and a solid income to service the loan. I think a mortgage broker will be best placed to assist you. For all we know the value of your land may have decreased 10% since you purchased it leaving you with zero deposit in which case you would have to sell the land. To be honest you may be leaving this a bit late - getting finance can take months by the time the bank goes back and forth asking for more documentation, values the property etc. I would be very nervous if I was you!

    • mortgagebroker on 06/12/2018 - 00:12

      I'm with pantsparty… very vague.
      Need to know your financial situation and your goals and objectives for the property and your future.

  • GangGang on 05/12/2018 - 15:42

    Wow that's crazy. Is paying 10% deposit and then getting a pre approval the new way of doing things now?

    Good luck getting pre approval approved in a few weeks, let alone Christmas.

    Do it ASAP so you don't lose your 10%. Get your a$$ to a broker.

    • ozbargainer86 on 05/12/2018 - 15:45

      That's how Home and Land Package works when you purchase from builder with long settlement date.

    • dcep on 05/12/2018 - 15:52

      pre-approval means jackshit , i can get 1 in and out the bank in 15 minutes for a single piece of letter printed out for me.

      you can only start your finance application when you receive notice to settle from builder, which is normally a month or less of notice period.
      that's how off the plan / land house package works.

      • ozbargainer86 on 05/12/2018 - 16:14

        I have't received that notice as yet. Thats why I am getting pre-approval so that when I get in expecting Jan 2019 I should be ready. Usually they give 14 business days to settle. I am not at this stage yet.

        • MrHyde on 05/12/2018 - 16:31
          +1

          As mentioned pre-approval means absolutely nothing. You need to get an unconditional loan approval; which means submitting all paperwork the bank needs and going through all their hoops.

          I just got a loan approved today and it took 10 weeks from the day I submitted the application form and so many questions back and forth - they questioned pretty much every expense in my credit card statement and every bank transfer in my bank statements (Both in and out).

      • GangGang on 05/12/2018 - 18:42

        I understand it doesn't mean much. It's better than nothing. At least you will know roughly the amount the bank will loan you or even if you're are able to afford a mortgage before giving a deposit.

        What if op is a casual that's been at a job for 2 weeks, or his income is only $600 a week. Just for example.

      • mortgagebroker on 06/12/2018 - 00:01

        Not true. You can get fully assessed pre-approval which is a complete approval subject to finding an acceptable property.
        The pre-approvals you talk about are jackshit though.

        • ozbargainer86 on 06/12/2018 - 11:08

          In my case its fully assessed pre-approval.

  • mortgagebroker on 06/12/2018 - 00:05

    What documents have you received?

    Do you have a contract for the land purchase?
    Do you have all the building plans and specifications?

    Is the 10k deposit only an expression of interest to hold the land/package?

    Go see a broker ASAP.

  • ozbargainer86 on 06/12/2018 - 11:09

    Do you have a contract for the land purchase? YEs
    Do you have all the building plans and specifications? Yes

  • HeWhoKnows on 06/12/2018 - 12:29

    Suggest you look at the comparison web sites
    Tthey do all the number crunching for you

  • Sofie519 on 11/12/2018 - 12:31

    You are after a land and construction loan. The overall loan is approved with 2 draw downs. 1st draw down happens when you settle on the land, and the 2nd draw down when you settle on the construction (some constructions may have multiple stage drawdowns depending on contract - so your loan application needs to take these things into account). You are not paying interest on undrawn funds. Depending on lender, some do separate loans, one for the land and another for the build.

    However the problem with a falling housing market is, your final valuation will be made on completion and you will need to set more funds aside if the price falls below today's valuation when the construction is complete. A broker can better explain this to you and offer you more options as well as be flexible in case of variables. They will also be able to assess your circumstance and recommend to you your options and structure.

    Comparison sites looks at very standard loans, a single lender is restricted with it's own policy and limitations. A good broker will compare the market for a loan suitable to your financial situation and objective.

  • ozbargainer86 on 14/12/2018 - 16:31

    Hi Guys

    I have conditionally pre-approved the loan subject to only valuation of land upon settlement which is Jan 2019 as they have done full assessment. Now I am upto get the valuation done before settlement so that I have certainity in my life and get the full approval from bank. Has anyone done land valuation before settlement on unregistered land ? Your suggestion will be appreciated.

    Thanks

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