[RayBCO]

Hi Everyone,

I have a question maybe you casn answer...

If I buy a parcel of land, previous house removed, with services etc. Then look for a house to buy and relocate onto the land...What are the issues, if any?

How would the banks fund this with a mortgage?

Would they, for instance, give you a mortgage to finance the house purchase, with the land as collateral?

Or do they only fund the land when making the valuation for loans?

Any hlep would be appreciated..

Ray

[james the mechanic]

Hi Ray,
I'm no expert however we did look into this last year before buying our house.
We spoke to the National Bank who were very helpful.
My understandind is...
If you buy a section now to build/relocate onto at an unspecified later date you can borrow up to 85% of the price of the bare section.
If you're building/relocating straight away you can borrow up to 95% of the finished property's value.
That said it is also possible to borrow on the finished project and draw down your loan in installments.
We found our bank (National Bank Napier) to be very flexible and understanding, they spent a lot of time with us answering all of our often stupid questions.
However in the end, we found that good sections were very costly and that you could often buy a comparable section with a house on it for not much more.
I think in NZ your money is in the land not bricks and mortar or ever weather board and iron.
I hope I have been of some help
James

[Lupin]

We have a 'progress payments mortgage'. We payed for most of the land purchase price in cash and they gave us a first payment of x % (can't remember exact figures off the top of my head)of the land 'as is' value, which we used for the remaining bit of land purchase price and are using to get services in and foundations down. Then we get a registered valuation done and they give us a payment based on the 'as is' price, which we use to get further along etc, etc.

We also have an orbit homeloan, which is like an overdraft but that you only pay interest on the money you draw down and is useful for the more bitsy things.

Go and see some banks and be prepared to 'haggle' a little as it seems fairly standard and you can get % off :)