Sydney is one of the most favourite cities in Australia. While being the most populous city, more people still love to move and live there.
Who’s not going to fall in love with this amazing city? Sydney has some of the most beautiful tourist spots in the world! Glorious beaches and harbours, paired with fantastic water activities, nightlife, wildlife displays, and amazing architectures, what else can you ask for?
Going on a tour around the city would fill your heart with so much joy and amazement. You will say to yourself; you want to live in this beautiful city by buying your own house. If you are planning to check some house and land packages in Sydney in the hopes of getting one, below is a quick guide in getting a loan for your dream home.
Two ways to get a home
Acquiring land and building a house later using a construction loan is the usual way to buy a new property as it is cheaper. On the other hand, turnkey properties are becoming more popular, although they are a little pricier. The good things about turnkey properties are you can move in right away, and they are less complicated.
By choosing the first option, you have to apply for a vacant land loan with one lender and another lender for the construction loan. However, this is advisable if you are planning to build the house in two or more years.
Meanwhile, the “turnkey” package is a specific type of house and land package. With this package, the developers acquire land, build a house, and sell them as a complete package deal. It comes with everything you need so you can move right away. It includes the following:
How much money can you loan?
For buying the land, first, you are allowed to borrow up to 95% of the land’s value. On the other hand, with the turnkey property, you can borrow up to 95% of the whole house and land package.
You will need the following documents:
- Three kinds of ID, such as a passport, Medicare card, and a driver’s licenc
- Two recent payslips
- Any recent statement of credit cards or debts that you have
- Bank statements (three months)
- Three to six months’ history of your savings account as proof of your deposit
For the construction loan, you will need:
- Fixed building contracts
- Building specifications
- Building plans
- Quotes for additional work
- Contract of Sale for the land
If you choose to buy a turnkey property, all of the costs are in a single contract as a regular Contract of Sale.
Turnkey property financing
The total cost of the house and land is set out in a regular sale and purchase contract between you and the seller. Usually, you need to deposit 10% right when you sign the contract, paying the remaining balance at the completion of the house.
For the builder to receive the remaining funds, the house must be 100% complete and ready to move in the equivalent code compliance certificate of your state. If you have only deposited 5%, and qualified for a 95% loan on turnkey properties, the bank would typically lend you the additional 5% to complete the 10% deposit.
These are just some of the basics to know if you are planning to get your first home in your favourite city. Go ahead and browse some house and land packages in Sydney and see if there is a house that you would like to call your home.
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