Financing a House and Land Package - EP43
If you’re looking for an investment property and want to save on some of the stamp duty, it may be worth considering a house and land package. But what’s the difference between that and a traditional mortgage? What are the risks? In this episode of Real Estate Matters, Toni interviews mortgage broker Laurence Kennedy about the benefits and potential pitfalls of house and land packages. First, Toni and Laurence discuss what makes a house and land package different from a traditional property. Laurence explains how the mortgage is divided between the land and the building, and the key stages when you or your lender will owe money to developers. They then discuss how the difference in payment schemes could result in saving tens of thousands of dollars on stamp duty. But what happens if a builder goes bust before the building is completed? Toni and Laurence discuss whose responsibility it is to find a new builder, and what you can do to protect yourself. They also discuss how such an event can impact your payments, and your cash flow in particular. For investors looking to rent the property out once it’s completed, there are several things to consider, including time scales. Toni and Laurence discuss the financial implications of buying a house and land package as an investment, particularly the time difference between your first payment and when you can start making income from rent. Finally, Toni gives out some tips about what to look for in a builder, and where you should look for more advice if you’re not sure of the process. About Laurence Kennedy Laurence Kennedy is a mortgage broker specializing in house and land packages. He owns his own finance company, Early Bird Finance. Topics Covered What’s the difference between a house and land mortgage vs. a traditional mortgage To what part or parts of a house and land purchase does stamp duty apply? When do you have to start making repayments on a house and land mortgage? Who puts their money in first, the bank or you? What happens when a builder goes bust in the middle of a build The importance of an independent building inspector at all stages of a build What do your payments look like while the house is being built? What your loan looks like once the house is built on the land The risks vs. rewards to investors buying a house and land package Contact Laurence Kennedy If you would like to learn more about Laurence’s company, Early Bird Finance, please visit their Facebook page. To contact Laurence directly: Mob: 0420 793 443 Fax: 03 8648 6380 Email: email@example.com Office 2/72 Railway Ave Ringwood East Toni welcomes questions and comments! Feel free to email her at firstname.lastname@example.org!