Many home loans are available for construction or for the purchase of vacant land. Buying land and then building follows a different process to buying established property.
Today most home and land packages are done through developers who purchase the land and then lay down the infrastructure.
At this stage the developers can either sell a complete house and land deal, or allow you to choose a standard or customisable home design and then find a block of land to suite the design.
The benefit of building your new home is that you get what you want and any environmental additions can be factored into the build upfront.
Is buying a house and land package purchase any different to buying a house?
Financing for a house and land package usually consists of two stages: buying the land then building the house. The loans can be arranged separately, but are usually bundled together.
Buying the land is a standard real estate purchase with regular mortgage.
When the time comes for the construction to begin, your builder will be paid in stages during the construction process and your loan balance will increase accordingly. This stage requires construction loan where you 'draw down' an agreed amount to pay for each stage as your home is built. That way, you only pay interest on the money you’re using at each stage.