Topic-icon Mortgage deposit on LSB

  • Daisyevans
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11 May 2018 18:36 #539838 by Daisyevans

Hi everyone

I am curious to know what % banks require for a deposit on a mortgage for a LSB and what bank you use?


thanks

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12 May 2018 08:48 #539841 by Kilmoon

Well I know that bare land requires a 50% deposit, irrespective of bank. Basically you need to ring around the big 4 and ask about their rules or ask a broker. The more deposit that you have the better chance of finance. Stay away from places mentioning "GST plus"....why pay for the previous fools escapades, plus the IRD has been clamping down on this tax rort and you do not want to get caught up in the mess.

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12 May 2018 09:21 #539844 by kate

We have been with SBS since we bought our first block. Back then they were Southland Building Society, now they're a bank. SBS is owned by its members, which I like and they understand rural, which I also like. It might be worth talking to them.

I have no idea what the deposit requirements are now....


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hoah.kiwi

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12 May 2018 17:27 #539847 by Cigar

We needed 20% for our 1.1ha LSB, I imagine there is some bank-determined size where it changes from a LSB to a farm, which I think require a 50% deposit.

Last Edit: 12 May 2018 17:28 by Cigar.

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13 May 2018 12:37 #539857 by max2

We needed more deposit for vacant land than the one with a house on it..... vacant land was at a higher interest rate too than the house lot.

Am hearing that the banks are on a go slow for lending purposes. Might be best to get a pre-approval check. The Woman who told me her experience had a $300,000 loan, sold house, cashed up and wanted a top up on the $300,000 to buy the next one. Refused.

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14 May 2018 17:08 #539903 by Hekto

We bought a 30 hectare block last year.
Since it was above 10 hectare ASB wanted 40% deposit.
ANZ was happy with just 30% deposit so we settled for them.


Wairarapa. 2 cats and a large veggie garden.

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14 May 2018 20:02 #539907 by Daisyevans

Thanks hekto we are using asb and I’m awaiting to see what they come up with for the deposit.
They called me today and asked for a copy of our estimated financials. My thoughts were we weren’t going to make any money more enjoy our lifestyle and make savings.
Has anyone come across needing to provide financials for the estimated income your property will earn?

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14 May 2018 20:47 #539908 by BlueApple

I believe it's 50% if the land doesn't have any power or sewage.

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15 May 2018 16:58 #539923 by max2

Daisyevans wrote: Thanks hekto we are using asb and I’m awaiting to see what they come up with for the deposit.
They called me today and asked for a copy of our estimated financials. My thoughts were we weren’t going to make any money more enjoy our lifestyle and make savings.
Has anyone come across needing to provide financials for the estimated income your property will earn?


Yes if you are already self employed! Your Bank Manager (from my experience anyhow) is trying to draw up a multi income strategy to support your loan application.

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18 May 2018 11:06 #539975 by rider1803

Hi all, I work for one of the big 4 banks in NZ.......these are my thoughts....
Most banks class over 10ha as a farm not a lifestyle but there is normally some wiggle room. In which case you may be referred to the Agri dept of the bank which is not necessarily a bad thing as they operate under different lending rules. However you will likely need more deposit i.e. 30%+
If the property has a house and 10ha or less the general rule is 20% deposit and provided you can service the loan there shouldn't be any issue.
If it is bare land (under 10ha) then it needs a 50% deposit unless it is serviced i.e. has power and phone at the gate. Which a lot of lifestyle block sections do - you need to check this first as the banker will ask.
All banks will look at a smaller deposit i.e. under 20% but it will depend on their capacity for low deposit lending. The reserve bank has set restrictions that all banks must stay within for low deposit lending volumes. Banks are unlikely to look at a property that is run-down or has deferred maintenance though with a low deposit as theoretically the purchaser cannot afford to do the work. There can also be other costs like a registered valuation.
If your application is not the strongest then go to a broker - they can help you present it in the best way possible and give you guidance on the best options.
Just my 2 cents worth.


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The following user(s) said Thank You: tonic, stentor

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23 May 2018 22:16 #540032 by Daisyevans

Thank you we are currently going through asb and have to put down 40% deposit.
Have provided them with some financial estimates for beefies.

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26 May 2018 18:12 #540084 by Sparxnz

50% for us with ASB 18 months ago.



120 Acres of Broom, Hawthorn and Barberry.
And a little orange tractor.

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13 Jul 2018 15:25 #540937 by Gyro

When we were on the lookout for LSB last year, the bank wanted 50% for a bare land.
They wanted 20% deposit if a house is already on.
Also, 20% deposit if we can build within 12 mos upon acquiring a bare land. All stipulated on the agreement of course.

We went for the 2nd option and was able to buy an old house but with a bigger section.

And we decided to use the services of a broker who was able to give us a better deal.

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