Most banks don’t offer specialised rural home loans, a niche that we are happy to fill. With more people seeking a rural retreat, we believe that this is an important service to offer clients.
Are There Limiting Criteria?
A rural home loan must be used for the purpose intended: to provide a home. This means that finance won’t be extended under these schemes to people who want to quit their day jobs and start out as a farmer, for example. One way in which banks and other lenders police tis requirement is to limit the amount of land they will finance with a rural home loan. Generally the limitation is 2 acres, though we have access to loans for far larger blocks of land (though bigger deposits are required). We can source rural loans of the following amounts:
- 123 acres up to 97% of the purchase price
- 150 acres up to 80% of the purchase price
- 200 acres up to 70% of the purchase price
The loan to value percentage is increased by combining a building contract on the land at the same time as applying for a rural loan for the acreage (in the example above, normally banks will only lend to 80% up to 123 acres).
Types Of Loans And Amounts Available
You can elect a mortgage with either fixed or variable rates, and offset redraw facilities are also available. In fact, we can negotiate a range of features and benefits, as well as highly competitive rates.
Loan sizes will depend on a number of factors (ability to repay, valuation, etc.) and will also be determined by the deposit you have available. Generally the deposit limits the loan as follows:
- Loans up to $1 million require a deposit as little as 5%
- Loans between $1 million and $2 million require a deposit as high as 20%
We can arrange for loans above this amount, and also we may be able to arrange for existing home equity to be used as deposit collateral.
Should I Seek A Pre-approval For A Rural Home Loan?
In almost every case we recommend obtaining a pre-approval. With pre-approval you can search for the right property knowing that finance will be approved. Pre-approval lasts for up to 90 days, and are made free of charge.
Contact Building Loans Australia now, and discuss your rural home loan needs. As specialists in rural home loans, our mission is to help our clients realise their dreams.