Mortgage on land in WA

alanmac · 16-02-2007, 04:30 PM

Hello, I'm moving to Perth with my family in November (visa willing) and having seen the rising house prices wondered if you can get a mortgage on a land purchase. I will have a small amount for a deposite ($50000 approx).

Thanks Alan

BullCreek_Bob · 17-02-2007, 03:12 AM

G'day Alan

Yes you can get a mortgage on land. However, you can't put a tent on it and live there. So you will still need to rent a house.

Paying a mortgage for a block of land and rent on a house is likely to be more costly than just just paying a mortgage for a house. With a $50K deposit and a good job you should be able to get a mortgage to buy a house. Sure it may not be on the beach with 5 bedrooms and swimming pool with all mod cons.

But you can get a mortgage to buy a good family home in a reasonable suburb.

alanmac · 19-02-2007, 04:26 PM

Hello Bob,

Thanks for the reply, and yes no matter how good the job I think renting and paying a mortgage may be a bit much. With this in mind do you know what the standard mortgage calulations are in Oz ( in the UK its between 3 and 5 times your income) and do they include overtime, as when looking for jobs the basic salary seems a bit low and I think I'll have to do plenty of overtime to make a decent living (sparky).

Thanks Alan

BullCreek_Bob · 20-02-2007, 05:00 PM

G'day

Banks here don't work on a multiple of your salary. They all have slightly different methods, which is why sometimes one lender will deal with you while others won't.

Anyway, a fairly common way is to look at how much money you have coming in, wages, interest, pensions, family allowance, etc... then allow for tax, allow for any repayments on debts like loans, credit cards and the like, then subtract their estimate of how much it costs to run a typical house (around $1,700/month for a couple with 2 kids) and then with the "left overs" they see how much you could afford to repay if the interest rates went up by a percent or so.

Most lenders will take into account overtime if you show that it's rquired as part of your job or that you've regularly been geting paid it over a period of time.

Once you've got settled into your job, I think getting a mortgage on a "typical" sparky's wage with a deposit of $50K is quite readily achievable.