Hey ppl’s,
This is probably one for the broker’s out there…
I was wanting to know what sort of assessment/underwriting criteria do the major lenders require for construction loans compared to normal loans – Is there a maximum LVR they will only lend to say 80% for Example?
I was looking to purchase a 1500m2 block of land in NE suburbs in Melbourne and build 4-6 units or townhouses but first I wanted to confirm with local council that this would be acceptable and secondonly what criteria the banks require for these particular type of loans
All help greatly appreciated [cap]
Kano
It is hard to get development finance with major banks. A lot want to see a certain percentage of the units presold before they give finance. They will also look at previous record etc.
There are some small private type lenders out there. I have onbtained fiance for a few clients using these. The LVRs will depend on location and size etc, but generally about 65% of the end value will be possible. This should be nearly 100% of your costs.Rates are 10-12% apporx.
Once the project is complete, you can then refinance with a major lender at a lower interest rate
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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