All Topics / Finance / construction – how does it work?

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  • Profile photo of quyhutmau83quyhutmau83
    Member
    @quyhutmau83
    Join Date: 2004
    Post Count: 1
    October 19, 2005 - 10:11 pm

    can someone explain to me about construction loan in detail? thank you
    Especially the 107% loan
    thanks so much

    Profile photo of Mobile MortgageMobile Mortgage
    Member
    @mobile-mortgage
    Join Date: 2003
    Post Count: 913
    October 20, 2005 - 7:35 am

    Hi quyhutmau & welcome to the forum,

    The 107.5% construction loan allows you to borrow 100% of the combined land and construction cost,
    The remaining 7.5% can be used to capitalise LMI and or closing costs such as stamp duty etc into the loan.
    However, the LVR must revert back to 100% after construction is completed.

    107.5% LVR no genuine savings required.
    Owner occupied only.
    Rate approx. 8.34% reverts to approx. 7.79% in year 3
    LMI approx. 2.25%
    No on going fees.

    Regards
    Steven
    Mortgage Broker

    Mobile Mortgage Market
    Ph: 0402 483 216
    [email protected]
    http://www.mobilemortgagemarket.com.au

    PLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.

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