First Home Owners Grant… How Does a House and Land Package Work?

If you’re dreaming of owning your own home and want to take the first step to getting your hands on a set of keys, one option for you to consider is building your brand-new home using a house and land package.

You have probably already heard of the term “house and land package”, but what does it actually mean and how does a house and land package work in terms of obtaining finance?

What is a “house and land” package’?

You can build in one of two ways. You can buy a block of land and then later search for the builder of your choice. A simpler, and more common way of building however, is to purchase your land and home together directly from the builder or developer as a package deal, hence the term “house and land package”.

How do I get finance for a home loan for a house and land package? 

Obtaining finance for a house and land package differs slightly from financing an established home as there are 2 steps in the process:

  1. You need to obtain a loan for the land contract;
  2. You then need to obtain additional finance for the build contract;
  3. Once you have finance for the build contract and the land finance has settled, the builder can then proceed to put the slab down on the property;
  4. The property is paid for in stages called “progress payments”. Progress payments are paid to the builder from the build finance loan account as the builder completes pre-determined stages.

Some helpful hints are:

  1. Make sure that you are able to obtain finance for the land and the build prior to committing to the contract;
  2. Ensure you understand how your loan repayments work whilst building your house, prior to entering into the contract;
  3. If you have to pay lenders mortgage insurance, ensure you have budgeted for the lenders mortgage insurance premium and ensure you understand what Lenders Mortgage Insurance is.
Am I eligible for the First Home Owners Grant with a house and land package?

Another great benefit of building using a “house and land package” in WA is that if this is your first foray into home ownership and you are an Australian citizen, you may be eligible for the first home owners grant. This means that the government will fund $10,000 towards the overall cost of your house and land package. The $10,000 grant is then used to assist in meeting your required deposit and upfront fees associated with your loans.

I want to finance my house and land package, what now?

This is where we step in. We know finance can be a complicated subject, especially for first home buyers, so we have a team of experienced brokers that take the time to ask the right questions and provide finance options tailored to your specific needs. Our goal is to get you into your dream home in the simplest way possible. Contact us on (08) 9367 4222 or by email [email protected].