"Home Loans" (Ft. Peter Fava) Ep. 7

In this episode, we’re joined by home loans expert and mortgage broker Peter Fava to unpack the world of home financing. Whether you're a first home buyer, investor, or planning your next build, Peter shares practical insights on navigating home loans, understanding borrowing power, and avoiding common pitfalls. 

Transcript

SPEAKER_00 0:25

Welcome back to Building Dreams with Virtue Homes. I'm your host, Kristen, and joining me in the studio today, we have Aussie Home Loans broker Peter Fava.

SPEAKER_02 0:33

Hi, Kristen. Thank you very much for having me today.

SPEAKER_00 0:36

Thank you so much for joining us. Pete, are you able to tell us a little bit about yourself and what it is that you do at Aussie?

SPEAKER_02 0:42

Yeah, certainly. So I'm coming on 25 years with Aussie as a mortgage broker. And um, yeah, fantastic company to uh to be part of or associated with, and basically um help many people with their home loan needs.

SPEAKER_00 1:00

Wonderful. So do you focus mainly in the Gippsland area?

SPEAKER_02 1:05

Correct. So all my all my um clients are self-sourced, so they can predominantly be within the Gippsland region, but of course we do you know home loans wherever they want. Melbourne, Queensland, New South Wales.

SPEAKER_00 1:21

So oh, you branch interstate as well.

SPEAKER_02 1:23

Correct, exactly. So the uh we can cover across Australia actually.

SPEAKER_00 1:27

So that's handy. It is so any uh Victorian expats who who move interstate, they can still take you with them to broker.

SPEAKER_02 1:38

So I mean now the beauty about um I suppose uh mortgage broking is that technology's there, you know. We can do teams meetings, um, which is like you face to face. You don't have to come into a exactly right, exactly right. So, you know, um so so that works well. So I've got uh many clients uh over many, many years sort of uh reach out and any purchase or any top-up loan or anything they want to know, they just reach out and yeah, happy to assist.

SPEAKER_00 2:12

Wonderful. And on the topic of purchasing loans or you know, refinancing or anything like that, what is it specifically that you do and that you facilitate for compliance?

SPEAKER_02 2:24

Correct. So good question. So as a mortgage broker, we deal with multiple lenders, predominantly, you know, uh under the Aussie um portfolio. So the way I like to put it across is that if someone walks into a bank and perhaps for whatever reason, credit policy or whatever, that bank cannot help them, a lot of people get discouraged, thinking, you know, I you know, that may be the same for every lender. However, it's not. The difference um involving a mortgage broker is that credit policy between the lenders determined where a client best fits, right?

SPEAKER_01 3:04

Right.

SPEAKER_02 3:05

In terms of interest rate, everybody wants your business, right? The interest rates very much predominantly are on par.

unknown 3:12

Yeah.

SPEAKER_02 3:13

But what determines, you know, what determines is credit policy most of the time, for argument's sake, you know, uh in the Gippsland region, we're involved with many people that work casually as part of the power stations.

SPEAKER_00 3:30

Right.

SPEAKER_02 3:30

Right? Now that casual employment could be two months casual here, another two months casual here with these employees. So they've got consistent income, but perhaps may not be with the same employer for a period of, you know, things. So we've got lenders who will be able to, you know, providing everything else as well, enable that credit policy to have that loan approved.

SPEAKER_00 3:54

Right. Right.

SPEAKER_02 3:55

Whereas other lenders, you'll have to be there for one employer casually for a 12-month period. So, you know, if someone's sort of multiple employees, it's just not going to fit that lender. Yeah. So that's that's the beauty about what we do is that we're able to, you know, just source the right product with the right lender.

unknown 4:16

Yeah. Yeah.

SPEAKER_00 4:17

To get a good output. You're able to match the client with the lender.

SPEAKER_02 4:20

So exactly. So um, and look, many clients perhaps don't fit into a home loan or be able to purchase today, but you know, when we have a meeting in terms of conversation, we'll put them on the track to say, okay, well, look, perhaps not this fit now, however, you know, do this, this, and this.

SPEAKER_00 4:43

Here are the steps to achieve it. Exactly right.

SPEAKER_02 4:45

You know, exactly right. So there's um, there's just yeah, so so many facets to this job, but it's always good outcome when you get the right result for the client.

SPEAKER_00 4:57

So absolutely, you know. And so then what is the process? Clients reach out to you, you have a a meeting, they tell you their circumstances and their goals.

SPEAKER_02 5:07

Exactly, exactly right. So, you know, uh people ring up and say, Okay, um Pete, I've been referred to you, you know, my friends purchased their home or whatever, they said, you know, the great service. They say, What do we need to bring? So look, as long as you bring some income details, but always at the first meeting, just sit down, just see what you want to achieve, what you want to do, you know, and um and that always works well. And you know, if I think, well, look, okay, yes, there's opportunity to be able to do what you want to do, then we'll go to the next step, perhaps a pre-approval in place, or you know, whether they're looking like land or construction. So, yeah, it's always starts from the first meeting.

SPEAKER_00 5:50

So, yeah, right. It sounds very similar to what we do at Virtue with our clients and that initial process is just understanding their goals and hearing their stories, exactly, yeah, exactly right.

SPEAKER_02 6:03

And and that's where um, yeah, that that's where it all starts, exactly, you know, and every scenario is so different, you know. You think you've come across it all, but there's just so many different scenarios, and also when um you know, um sitting down with a client, perhaps whether or not they haven't got any safety in place, but uh we've done many loans where their parents have become security guarantors to allow to be able to use some equity in their property to allow them to be able to purchase land, to be able to construct the building, you know, that that they'd like to uh move in. So there's so many different areas there that we can, you know, we can look at or help assist them.

SPEAKER_00 6:56

So yeah, there are options available.

SPEAKER_02 6:58

Correct, correct, yes.

SPEAKER_00 7:00

That's very exciting. And are you based in Trelgan or where are you located?

SPEAKER_02 7:06

So I um I am based in Trelgan. I um so there's two of us, so there isn't as Aussie franchise in Terelgan, which I'm not part of, but I choose to um work out of a serviced office in Trelgan. Um not branded as Aussie, but I choose to work out of there and um yeah.

SPEAKER_00 7:29

Right, so you're Tirelgan local.

SPEAKER_02 7:31

I am Terelgan local, correct. Yes, yes, yep.

SPEAKER_00 7:34

And Tralgan being almost the unofficial capital of Gippsland, um, and Gippsland being Victoria's rural side, rural piece. Do you see a lot of home loan applications for residential builds in rural areas?

SPEAKER_02 7:52

Correct, yeah. Look, you've only just got to drive around. You know, you only got to drive around. Exactly right. Look, the the the subdivisions, the the building that's going on, and and it it all just seems to be positive. So I think you know, uh where you've got a lot of building construction, everything, you know, I think all all the income or all the jobs are all stemmed from that construction industry, you know, where you know, you got the car yards, sell cars from it, your tiles, your floor coverings. So um, so it's a it's a great um it's a great industry, but also Trailgans a huge growth area. Massive, yeah, massive growth area. Exactly. So I you know, uh it can definitely be considered as a major regional centre of Victoria.

SPEAKER_00 8:45

Yeah, it really is quite the the hub of Gippsland here. Um, but that does mean that the bigger that Trailgan gets, the more some people are looking to expand to the outer areas, build on property.

SPEAKER_02 8:57

Correct, exactly.

SPEAKER_00 8:58

Is there a difference between a home loan for a home in a suburban area versus a rural block?

SPEAKER_02 9:05

Okay, yep. So in terms of the home loan itself, it's the same, it's the criteria.

SPEAKER_00 9:11

Right.

SPEAKER_02 9:12

Okay, so the criteria meaning that um some lenders do get it uh uh I suppose not within their credit policy, once a certain area reaches, you know, uh whether it's 25 acres or whatever, they're out of that space for construction, right?

SPEAKER_00 9:33

Right.

SPEAKER_02 9:33

And also depending on the zoning. So it could be rural residential, it could be rural, or it could be actual farming. So that is a major um, I suppose a red flag for some lenders, right? If it's farming, it might only be two acres or three acres, but a lot of them are focused on that particular zone, right? However, the good thing is that we have got lenders that don't I I suppose concentrate so much on the zoning, but on the purpose. So if it's a um, you know, if it's up to 50 hectares of land, you can actually build a residential um dwelling at a residential home loan for that property, right?

SPEAKER_00 10:25

Even if it's zoned farming, correct, right?

SPEAKER_02 10:28

Exactly, not all, but we you know the beauty about being a broker is that you do have a panel of lenders that we can work with.

SPEAKER_00 10:34

You know that exactly Joe from so and so will we lend that exactly right. So not know that.

SPEAKER_02 10:42

So that's a uh so that yeah, we've certainly you know been able to win a lot of sort of uh deals that way. Also, um, you know, we're starting to get into a situation where we can, you know, see that some people want to be off-grid or whatever, yes in terms of that.

SPEAKER_00 11:03

Yes, definitely.

SPEAKER_02 11:04

Correct. So that once again, um that is not an issue with some lenders, providing that they've got the relevant permits in place to be able to allow that, right? So um, so we can get a home loan approved, but no funding is going to be released to the builder without the necessary permits in place, right? So if if you know if um if the council has approved a um uh a dwelling to be built on the basis that they want to go yeah off-grid in terms of power or um water tanks, water tanks or whatever, providing that it's acceptable and it's in the permits that allow that, that's fine.

SPEAKER_00 11:56

Right.

SPEAKER_02 11:57

Not all lenders, yeah, but yeah, we have lenders on the panel there, that that's not an issue whatsoever.

SPEAKER_00 12:02

So that seems to be the takeaway from this discussion.

SPEAKER_02 12:04

Is not all lenders that's why you engage a broker is look, it's it's just so important, it's so important because um, yeah, we you know we know where to place the applications, right? We know who's got the you know, the the credit policy that allows that to take place. So right.

SPEAKER_00 12:29

So when you're initially speaking with clients and they're telling you, oh, we'd like to build our off-grid branch sale home in this area, you in the back of your mind you're going, I know the lender fee. Exactly, right, exactly.

SPEAKER_02 12:44

Yeah. So, and and look, uh along with that, then obviously um, you know, we have our um we call LVR or loan to value restrictions. So, in terms of, you know, if someone has a 20% deposit to allow this sort of thing, the better, right? But anything under the 20%, um, especially when you're starting to get into large acreage or whatever, that does become a little bit difficult, right? In terms of that, there, because they get their loans insured by a mortgage insurer. So the mortgage insurer determines what will allow and will not allow, basically.

SPEAKER_01 13:29

Correct.

SPEAKER_02 13:30

Yes. So yeah, so up to um up to an 80% lend, the lender um can sign off on their own. You know, there's no because there's no, it doesn't have to go to a third party for mortgage insurance. Risk for exactly right. Yes, yes, yeah.

SPEAKER_00 13:47

Okay, so if you're dreaming of building a rural property, yes, have ideally that 20% tucked away.

SPEAKER_02 13:56

That yeah, when you're starting to get into the larger sort of uh, you know, parcels of land, that's definitely requirement. The the 1,500 acres plus well, yeah. Look, that's fine. You know, quite often we can go up to your 90, 95%, right? In terms of that there, correct. But once you're starting to get up to the the 50 hectares, yeah, is you know, they'll pull back and say, um, look, we'd prefer this at the 80% land with no LMI. There can be exceptions always, but it's just case by case sometimes.

SPEAKER_00 14:31

So that makes sense. Oh, good. I I think a lot of um we're seeing a huge boom at virtue of people who are obviously building rural. Um that's always been a thing, but building off-grid, building on larger parcels of land than what you find in the suburbs, but uh still well under that 10 acres.

SPEAKER_02 14:53

Yeah, and which is fine. Which is fine. Exactly right, yes, yes, yeah. And look, once again, um it can be a bit complicated, however, it's it all uh once again with some lenders, it does fall within what postcode does that sit in, right? Right, exactly. So you know, is it 3844 or whatever? So I've done parcels of land where you know, uh up past Argo and all that, you know, sort of the oddia's where some lenders, you know, will not sort of do a residential loan there. They might do a uh an agri loan, whether it's for a farming or whatever operation, but not a standard residential loan. So I've been able to get them through some lenders. So it's just, yeah, there's so many, so many different sort of um factors that come into play.

SPEAKER_00 15:54

Absolutely, yeah. Well, I had no idea about the um loaning capabilities for different zones. I always just sort of assumed if a property was zoned farming, it could only be used for farming.

SPEAKER_02 16:08

Well, it it used to be the case. Um but look, some lenders have come out and said, well, look, at the end of the day, I mean, if it's three acres, four acres, if it's zoned, who's farming on that? If someone's gonna put a house on there to live in it themselves as unoccupied, or or it might be a little bit larger, but perhaps it's not income-producing. So to you know, we've got a job we work here, we're not making money off the farm and all that. So, you know, they're they're open to that sort of right. Yeah, so that's an exciting it is, it's good, it's good. So um, but it just um it makes it a better outcome for the client.

SPEAKER_00 16:51

So yeah, it opens up more doors.

SPEAKER_02 16:54

It does, it does.

SPEAKER_00 16:55

That's yeah, that's very exciting to hear, um, especially with people wanting to to make that move out to more open skies.

SPEAKER_02 17:05

Correct, yes.

SPEAKER_00 17:06

Is it I don't want to say harder to find a lender for those who are wanting to build off-grid versus in an estate or a suburban area?

SPEAKER_02 17:18

Yeah, look, I think um I think there's been a big shift in that in that uh thought process now too, with you know, we're off-grid. Um now I think more than ever now we've got the right uh uh, I suppose, systems to allow that to happen. Whereas perhaps 10 years ago or 15 years ago, there wasn't that sort of you know, power off-grid as such. Um but so a lot of that now does come into play, right? Not I haven't done a lot of it, I have done some of it, but it's um it's good that to know that you can assist those clients in those situations, right?

SPEAKER_00 18:02

Yeah, absolutely. And it sounds like things are ever evolving in that space.

SPEAKER_02 18:06

Correct. I it's always changing. Everything's changing.

SPEAKER_00 18:10

How hard is it for you to keep your finger on the pulse and stay up to date with lenders and what they offer?

SPEAKER_02 18:17

Um, well, great, especially when you know when you're dealing with uh over 20 lenders, so you do want to um be across all the changes, fortunately. Um being part of Aussie, we have a daily um uh uh catch up or you know, log into teams, so brokers all around Victoria, Australia that are involved with Aussie, and we sort of um uh um I suppose workshop scenarios. So, yeah, we put it out there, and the you know, the chances are that another broker in the meeting has done that scenario and say, okay, well look, you know, CBA for this deal or NAB will work for this one. So we're very um we're very good that we've got that, you know, up-to-date sort of thing with all those.

SPEAKER_00 19:09

Yeah, but so are you able to almost put the call out and say I've I've got this tricky.

SPEAKER_02 19:16

Correct, exactly.

SPEAKER_00 19:17

Oh, so there's there is that that help available to you.

SPEAKER_02 19:21

Exactly. And and on that, there we um there's um Bertie Amps, and uh so sometimes fortunately we're able to get assessors on there as well so that we can workshop. So it's it's a really great system and it's a good initiative uh from Aussie to do that. It just um, you know, it it could save hours, just you know, if you had to do it yourself in terms of following up for the different lenders.

SPEAKER_00 19:48

So yeah, that's wonderful to know that you have that network.

SPEAKER_02 19:53

It's great. We've got the network exactly.

SPEAKER_00 19:55

That's the right word that works for the client.

SPEAKER_02 19:56

It does, it does. So, and it's all about you know, ultimately, it's all about the the outcome for the client. Yeah, yeah, trying to get the work. Making sure that you know, um, everybody wants their dream home. You know, that's uh I think that's the everybody's dream. So it's good that you know you do your best to be able to sort of see that you know if that can if that can happen.

SPEAKER_00 20:22

So yeah, absolutely. And on that, everyone wanting their dream home. Of course, that is the case. Some people just want a home, yes, uh, and to get out of the renting cycle. Correct. Are you seeing any shifts, any trends for 2026 in that space?

SPEAKER_02 20:39

Yes, yes, good good question. But uh at the moment, um as a first home buyer, there's no better time than now to get into the market.

SPEAKER_00 20:53

Right.

SPEAKER_02 20:53

And I say that with the um the government have introduced a home buyer guarantee scheme where you know providing they qualify in terms of um you can purchase a property with the 5% deposit. You know, regionally it's about up to about $650,000. So you know, uh, so you've got your 5% deposit, and the benefit of that is is that that 5% deposit, there's no lender's mortgage insurance attached. So it's the government guarantee the 15%. So that's a saving of thousands. And they also get the interest rate as if it they had the 20%. So they get it, yeah. So that's an extra bonus. So um at 650 in Victoria regionally, yes, there is still a little bit of stamp duty payable, but um, you know, they they can get into a home quite easy. Well, providing you've got the deposit, that's always the hardest part because Well, the struggle is is that people are renting, they can make the repayments, but they can't perhaps rent and save at the same time.

SPEAKER_00 22:11

It is increasingly difficult.

SPEAKER_02 22:13

So that's difficult. But at least there, you know, um, I've had many clients where, you know, we've had the discussion, and I think perhaps I haven't been able to help them that day, but I always say, Well, look, this is the situation. When you walk out of this office today, you'll be in a better understanding of knowing what you need to do, what you want to do. So a lot of them um walk out very motivated, say, okay, I haven't got that deposit. Or they may call in on family to provide some deposit, etc. So that's that they're always the good ones where you know they you can see that journey come through to their home ownership.

SPEAKER_00 22:58

So yeah, that would be very, very rewarding, I think, to see that come through. It is, it is, it is absolutely, and so even if you're not able to get some paperwork rolling or get you know pre-approval organized that time, at least they're walking out educated, they know what they need to do.

SPEAKER_02 23:17

And you know, um many clients, I might see them in six months' time or 12 months' time, you know, sort of uh have absolutely done that because ultimately it's it's how motivated they are, yeah, you know, to um because you know we all we all earn many uh money, sorry. And um and we've all got a thousand needs, you know, or wants more so sort of thing. But if they've got something motivated to say, well, look, I'm gonna start saving, I want to get my home. This is the time frame I want to get it, yeah, then that's that's that's great.

SPEAKER_00 23:57

That's yeah, that's exciting. I think for some people and myself included, we just need to know what the options are and and hear the figures. Like if you save X amount per week for X amount of time, correct? You will have X amount for your deposit.

SPEAKER_02 24:13

Exactly.

SPEAKER_00 24:14

And sometimes that's all I need is just to actually see it written out. And then it's like, oh, I I can do that. Yeah, I'll cancel Stan and I'll Well that's the thing, exactly.

SPEAKER_02 24:24

You know, and and you know, I I think you know, you know, some people walk in and say, Well, look, I've got 2,000 or 3,000. And it's just good to see that journey that, you know, they'll come back in six months' time and say, you know what, I'm at 18,000 or whatever. So, you know, so they've got that goal, and I think that's what some people need, just to say, you know, for them to hear, yes, it's possible, you do this, this, and this, then it gives you that chance to be able to qualify for that that that home.

SPEAKER_00 24:59

Yeah, yeah, that's yeah, wonderful. I think it's all about destigmatizing, going for a home loan. It's it can be so scary and so stressful. Correct. Some people just don't even want to talk to a broken and have their dreams crushed.

SPEAKER_02 25:15

Look, exactly. And you know, um you can't help everyone, right? As much as you want to, but at the very least, when they walk out of that meeting, they know exactly what the situation is, right? They know, okay, well, look, perhaps I may not qualify it now, or you know, uh, could be a seed that's planned to say, you know what, I haven't got into the closet. However, my parents have offered some money, you know, or a gift or security guarantor, yeah, using equity in their home, um, which is uh which is becoming more and more, I suppose, uh common.

SPEAKER_00 25:57

Yeah.

SPEAKER_02 25:58

And so, you know, thing is, if you don't answer the question, you don't know the answer. That's a thing.

SPEAKER_00 26:04

So absolutely, yeah. Well, my husband and I bought our home in Warregal, and we bought it with my parents' going guarantee for us.

SPEAKER_02 26:13

Fantastic.

SPEAKER_00 26:14

That wound up being the best option for us at the time. Um, and I my tip to everybody is if you want to go down that path, what I did is I sat my parents down and I presented them with some figures. Um, you know, in this amount of time, we will be able to take you off the loan as a guarantor. Um, you know, and this is what it means for you. And they were able to I think my parents would have said yes anyway, to be honest. But I felt like I needed to present that case. Exactly. And some people may need to, their parents might hear, oh, you know, can you go guarantee for me, mum and dad? And they might go, Oh, what is our house at risk? Is you know, what's that gonna happen? Yeah, presenting that, and I had no idea that was an option until I spoke to a bigger.

SPEAKER_02 26:59

Yeah, correct, exactly.

SPEAKER_00 27:00

You guys are the reason that we have a roof over our heads.

SPEAKER_02 27:04

Well, that's the you know, um that I think from a Garantor's point of view, they need to know the ex what's involved, you know. People say, Okay, look, you know, are we gonna lose our home?

SPEAKER_00 27:22

If the yeah are we at risk helping you, Junior? Correct, exactly.

SPEAKER_02 27:28

So many parents know what their kids are like. Yeah, so I have had the appointments where uh the guarantor said, look, yeah, I like that. I'll do it for this child, not that child, right? Exactly. So I know I I know what he or she is like, sort of thing. So but it's it's a limited guarantee, so they're they're guaranteeing the 20% portion.

SPEAKER_00 27:51

Yes, right.

SPEAKER_02 27:52

So not they're not guaranteeing the total home loan.

SPEAKER_00 27:55

Exactly.

SPEAKER_02 27:56

Um, but and important to know. Exactly. And look, um, I've done many of them, and especially the way the property prices have been increasing. Yes, they perhaps might have started off with a 30-year guarantee against the parents' property, but many of them have been removed, right? From their property. So exactly right. Exactly.

SPEAKER_00 28:23

So it all works out.

SPEAKER_02 28:24

Exactly. So that um that that has been, you know, I suppose, like yourself, uh a great opportunity to get into the house in market. Exactly.

SPEAKER_00 28:36

Yeah, absolutely. On the flip side, my young, well, not youngest, my middle brother has uh recently, end of last year, purchased a property. Yes, they went the other route, they actually lived on my parents' property for two years, okay, saved up a bunch, and then that's how they were able to get their 20%. It's there are options if you're willing to live with your parents and in-laws, or it's all about sacrifice exactly, exactly.

SPEAKER_02 29:05

And it's all about how you know the motivation is really determines, you know, the thing. Um I do see some more motivated than than others, right? But uh for many that say, you know, look, I really want to, you know, break that rent cycle, or I would do want to move out, do whatever. I want my own family, but exactly.

SPEAKER_00 29:27

Yeah, I don't want to be green teams.

SPEAKER_02 29:28

You know, the um uh the great thing is that when you know when when you work it through and you make that call to them to say, look, great news, it's all been approved. It's just yeah, you just the look, you know, exactly. They're just so excited.

SPEAKER_00 29:45

Oh, that's so wonderful. Yeah, so your your piece of advice would be if you say, for example, I'm a first home buyer and I have my five percent saved from ready to go, and perhaps I I've been thinking, oh, I should wait, I should wait, I should time the market. You're saying now is the time.

SPEAKER_02 30:08

I look, once again, as long as that situation allows front to to, you know, in terms of affordability, etc. But I think, you know, um doing this for for over 25 years, it just seems to be that, you know, and I look back for the people who have purchased, you know, 15 years ago, 10 years ago, five years ago, you know, the the prices of houses always just seems to be going up and up and up.

SPEAKER_00 30:36

So there's no timing the market, it's not going to and you know no. Well once you once you own a home, you're like, well, I hope that they don't well, I I think also um with with the the huge shortage of housing that we have got, you know, uh I don't think they're going to be coming down, right?

SPEAKER_02 30:59

But I'm I'm no I'm no uh export. I'm no thing there. But but yeah, but but quite often I think it's uh if someone can get into their own home and it's affordable for them and it meets all their needs, you know, especially with with the the government guarantee at the moment that's in place, it's just um it's just a great way of getting in into the market.

SPEAKER_00 31:25

Yeah, now's as good a time as anything.

SPEAKER_02 31:27

Exactly. Yeah. So uh first home buyers uh in that sweet spot of you know 600, 650, they are competing at the moment with investors coming into the market. So and especially I think uh in the Valley Terelgan, More Lamoe, um, you there's many investors from all over Australia buying in through buyers advocates, so sight unseen. So, you know, so yes, so there's a bit of a eddy, so there's a lot of competition out there.

SPEAKER_00 32:00

On that, um, you know, it is very competitive to buy established houses at the moment, exactly. There are a lot of investors. Is it what is the difference between applying for a loan for an established home versus a loan for building as your first home?

SPEAKER_02 32:18

Yep, yep. Okay, so good question, right? The um the process is very similar in the sense that um, you know, whether if someone's got their land already, then it's a lot easier process, right? Because they've got the land and they're they're you know, providing they've got the deposits, etc., they've got the um the time to you know come to Virtue to to have a look in terms of their build contract, etc., and go from there. But if they're looking at um house and land, then that becomes a bit more complicated, right?

unknown 33:02

Right.

SPEAKER_02 33:03

Is the land tied right? Is it available? Right, exactly, because quite often, if you want to get uh a full approval, you need to have the land contract as well as the building contract, right?

SPEAKER_00 33:19

You need to have both. It can't just be for a mystery block somewhere, yeah. Exactly.

SPEAKER_02 33:24

So you can have a pre-approval in place, right? So it just depends on the time frame where because as you're probably well aware, to facilitate you know, your plans, your building contracts, etc., to to build a dwelling, that might take quite a few weeks in place. So the vendor of the land, are they willing to wait that time frame to allow the purchaser to do that process? So it's just um possible, but just a bit more complicated, right? So it really does depend on the situation of the vendor with the land. Is it titled? Are they willing to wait that time frame? Do they just want to sell it?

SPEAKER_00 34:06

And yeah, so right, versus buying established and their houses there, the land is there. Exactly. Right. So there just may be some other steps involved.

SPEAKER_02 34:16

So, but if it's if you know, uh once again, depending on if their situation, terms of income and deposit, so they can uh perhaps secure the land purchase, at the same time put in a pre-approval for a construction of okay, the construction's going to be 650 or something like that. So they can that that's about the best they can do in that situation.

SPEAKER_01 34:41

Right.

SPEAKER_02 34:41

So once you know, once they settle on the land, once they get all the building contract plan specifications, then we can convert to it to a full application loan.

SPEAKER_00 34:52

Right. So there are always things you can do.

SPEAKER_02 34:56

Well, there are, there are exactly. So yeah, there's that many different scenarios or situations that we work with.

SPEAKER_00 35:03

So yeah, and is the are the options for lenders for first-time builders versus first-time buyers, are there fewer, more, about the same?

SPEAKER_02 35:15

Look, um that process is is virtually the same, right? In terms of that, there. So ultimately at the end, the lender wants to know, okay, what's the what's the land value, what's the build value? They'll get it a um we'll, you know, if there's a building contract in place, we will send that off to the valuer to see what that value is up as. And then we can work backwards to say, okay, well, what deposit do you have? You know, what's the borrowing capacity? Can we make it work? So that's um, so yeah.

SPEAKER_00 35:53

It's it's very similar. And do you know if the government incentives or lender incentives are uh much the same?

SPEAKER_02 36:02

Or yeah, but so in terms of pretty much the the first home buyers is your ten thousand dollars billed, right? But you do get stamp duty waiver if they're uh eligible off the land purchase as well. So yeah, so in so the incentive there for the first home buyers uh generally the government incentives, right? Not necessarily the lender incentive sort of thing, but lenders, you know, as long as the lender has the policy that because not all lenders do land loans, construction loans. So as long as you know that that sort of fits with that.

SPEAKER_00 36:41

Yeah, no, that makes sense. I think even just a few years ago, it was the most common uh route was to buy established as a first home buyer. But being that there is a shortage of established homes, I we've found that building is becoming more common.

SPEAKER_02 37:00

Yeah.

SPEAKER_00 37:01

Um, are you seeing the same trend?

SPEAKER_02 37:04

Look, um I am in terms of you know, you do get the um you do get the the first home buys that that what new, you know, that you know, we've got our deposit, we can do this, and you know, this is where we want to be and this is what we want to build. So it's just yeah, yeah, it's that many different sort of so many different clients, exactly. Correct, correct. But the the good thing is is that um I mean you've only got a drive ranch or algan uh more mowing that subdivisions are happening, you know, that you can see there are new estates, you know, popping up. They are just yeah, exactly.

SPEAKER_00 37:50

So it's the same in Bourball where I am.

SPEAKER_02 37:53

Yeah, oh correct, you know, pockets of land everywhere.

SPEAKER_00 37:57

So but that's also uh we're finding, especially here at Virtue, being um specializing in rural builds, and we obviously do um suburban builds as well, but specializing in rural, we're finding a lot of people because the towns are expanding and getting busier, and there are more subdivisions going in, people are looking to make that move now out a little bit further. Correct. And those are the second or third time home owners, correct, exactly, the parents, yes, and I guess that's exciting. The more of those kinds of people in those scenarios, perhaps empty nesters that move out, the more established homes get free up.

SPEAKER_02 38:38

Exactly. So correct, exactly, and then we can move in. Look, exactly, and uh yeah, definitely. So there's a that's a huge market, yeah. Huge market. So uh yeah, wonderful.

SPEAKER_00 38:52

Well, Peter, do you have any closing remarks, any um pointers that you'd like to give to the listeners?

SPEAKER_02 38:59

Yeah, look, um I think that if you know if someone is thinking of getting into the market or wants to talk to a mortgage broker, they're more than welcome to give me a call. Yeah, but but importantly, it's I just can't sort of stress enough, it's better knowing exactly you know what what you need to do or work with or qualify to be able to move in, right? Many people think, oh, you know, it's whether it's too hard or I didn't want to call you P because I mightn't be a candidate.

SPEAKER_00 39:34

You didn't want to waste your time.

SPEAKER_02 39:35

Exactly, exactly. But guaranteed after that meeting, they know exactly where they stand, what they need to do. Um, many of them just you know walk out happy in the sense of look, we're we're there or we're nearly there. So so that would be the um, you know, uh yeah, that that that would be the takeaway, definitely.

SPEAKER_00 40:00

Yes, knowledge is power.

SPEAKER_02 40:01

Look, it is, it is, and at least um, yeah, uh that there's some really good incentives available.

SPEAKER_00 40:07

Thank you so much.

SPEAKER_02 40:08

No, thank you so much. You made it so easy, you know, talking. So uh I thought I'd yeah, so no, thanks, thanks for having me. And um, yeah. Happy great to be part of the virtue uh podcast.

unknown 40:22

Yay.