Home Loans 101

By: OpenLot.com.au | 20 Jul, 2023

Home Loans 101

[House + Land Expo 2022] Home Loans 101 - Al Jordan (Woodrow Finance Group)

Speaker Al Jordan from Woodrow Finance Group discussed various finance-related topics and mentioned that his company can facilitate requests related to finance, although they may refer clients to other partners for certain specialised cases while showcasing at the House + Land Expo. Being a broker, Woodrow has access to over 45 different lenders, giving flexibility and options to accommodate individual situations. Al emphasised the importance of doing thorough research and speaking to a broker and a bank when considering house and land purchases, as not all banks offer land and construction loans.

Al provided an overview of the current market situation, highlighting the rise in interest rates since May 2022, which was the first increase in about 10 years. The cash rate was at 2.6, with speculation of another increase in the near future. Al mentioned that these rate hikes were impacting long-term mortgage payments, and borrowers needed to be mindful of the changing landscape. He also mentioned that the borrowing capacities had decreased due to the banks implementing assessment rates and buffers on top of the interest rates, which affected the available lending.

Regarding structuring loans for house and land purchases, Al discussed three common ways to structure loans. He noted that construction loans couldn't be fixed, but there were lenders offering competitive variable rates. He advised buyers to consider factors such as:

  • Paperwork
  • Postcode restrictions
  • Pre-approval validity, and
  • The importance of selecting the right block of land

When it came to the construction phase, Al explained that progress payments during construction would be interest-only, and additional costs or changes to the building contract would need to be covered by the buyer. He recommended working with building inspectors and doing thorough research on the builder.

Al touched on government grants and exemptions available for first-time buyers, emphasising the savings that could be obtained through these programs. Al stressed the importance of understanding one's current financial position, getting contracts reviewed, considering timing factors, conducting thorough research, and booking appointments with professionals to assess borrowing power and set goals.