A couple of questions

[korahblue]

Hi Andrea

We will be getting a loan by the end of the year [once we manage to snag some land here] which from what I understand from the mortgage broker we spoke to will be two loans - one for the land and then a construction loan when we start to build. In total we will be borrowing 250-300K

So my questions are:
- should we consolidate our other debts [personal loan $7000 and credit card $3000] with one of these loans and pay them off over a longer time period but obviously with a lower interest rate. Or keep them separate and have them paid off in 2 years
- hubby has bought a house previously but is there anyway we can still get the FHOG while using his income to get the loan? Im thinking not, but thought I would ask anyway. We will still get the loan without it but the extra $$ it would save would be nice

Thanks for your advice!!!

[andie_pandie]

Hi Korahblue

Thanks for your questions. With regards to your first question re consolidation, you will not be able to consolidate into your initial loans due to equity. Generally you need at least 15% equity including the debts in the property before consolidation can occur.

As long as it does not affect your deposit I would look at reducing your personal loan and credit card down as much as possible to make it easier when you do purchase your land. Concentrate on the highest interest rate first.

With regards to Land and Construction it does not necessarilly have to be two loans. If you have a low variable rate for the land, then when it comes to the construction this can then be done as a additional loan to the variable. What would happen is the funds to construct would be placed into a progressive draw account and as you draw the variable loan would increase as per the amount required for the drawdown. You may choose to do two loans if you want the land proportion fixed if you are worried about interest rate increases.

With the First Home Owners Grant even though you yourself have never had a loan previously but your partner has it does unfortunately make you ineligible. I myself missed out on the grant as it came into effect just after we purchased our first home here in Australia.

Good luck with your future purchase.