House & land package loan – Is it right for you?

Whether you are looking to get on the property ladder or purchase an additional investment property, a house and land package may be the way to go. Whether you are looking to purchase in Auckland, Hamilton, Tauranga, Wellington, or further down the line financing in this fashion is always about weighing your options up.

When considering if it is the right choice for you, one must consider all their options. Going down this path ensures you have ease knowing you own the land but also the ability to design your own home plan.

Choose where the windows are, the view, customisation of layout and the shape and form of the structure is a great plus.

Looking like New

House and land packages can be a great option for buyers looking to purchase their first home. Buyers know exactly from the start what figures they are looking at to get a realistic idea of pricing. As well as that, who wouldn’t want to get reassurances from a new build in terms of warranties and security you might not otherwise get.

As the property is newly built, homes are inclined to be more energy-efficient and may not need repairs hopefully for years to come. New homes will be covered by a building warranty giving you peace of mind should anything go wrong.

A lot of these new builds tend to be located in newly allotted areas and subdivisions. What this can mean is that quite often new businesses like supermarkets and other facilities, can be newly finished alongside the new area giving you other perks you may not have thought of.

What’s included

A turn-key loan and ready to use may not be a term used that often, but it certainly comes to mind with house and land packages that are move in ready.

A turnkey build is one where we you make a deposit usually 5-10 percent of the purchase price and do not make any further payments until completion. This is usually in contrast with a construction loan whereby payment instalments are made over the duration of the build and key stages until completed.

As a purchaser it is crucial to evaluate what comes inclusive in the purchase as it is not as straight forward to get sorted once the product is complete. A fully functional property is one that an investor can purchase and immediately rent out. Be sure to check what’s on the plans and what is not covered. This applies to pathing, fencing, driveways, other fixtures. Aspects that you may have not considered. It also pays to check furnishings quality as well.
Additionally, as building a new home from scratch may take a long time. Sometimes this process can typically take around 6 months including consent and council process time give or take a month or two.

The time factor is also of consideration if you are stretched in terms of relocation.

Another factor to consider is who is the builder? do they have the experience? How long have they been in the game and what does their track record look like? It is important to select a reputable build partner, do the research and see examples.

In terms of deposit some lenders can offer you packages that require a deposit as little as 5 percent depending on the lender so getting that deposit sorted might not be as far off as you might have thought.

Purchasing a first home can be the single largest investment purchase you may make in your entire life, so it pays to be prepared.

For getting a great rate and help with sorting your home and loan package loan. Talk to the mortgage and Insurance experts. They can assist you in getting your financials sorted so you hit the ground running from the very start. Talk to the team at Global Finance today!

**These are general guidelines and are by no means a reflection of bank or lending policies