Hi all,
I'm currently looking to develop a small block of 950m2 into three units and I was wondering about peoples recent experience getting a construction loan. Cash for the deposit is at a premium so I was hoping to get finance for as much of the build as possible. Couple of questions:
Can I use LMI to increase LVR?
What is the typical maximum LVR around at the moment post GFC?
Thanks,
Thommo
Hi Thommo
Small development finance is at a premium so without more information it is difficult to comment.
It is an area we probably are getting the most number of enquiries from at the moment and there is no right or wrong answer.
Would depend on the balance of the deal.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Small development finance is at a premium
It is an area we probably are getting the most number of enquiries from at the momentThats very interesting …. what do you put that down to Richard?
A lot of lenders are still only lending 90% LVR for owner occupied construction (Fixed Price Contract) LMI are also being a little hesitant on some deals
For a development deal such as yours I would think 80% LVR would be the most you could expect and this will probably not be at 'Home Loan' rates
Thanks guys – I prob have enough cash to finance the build of one (but not three) unit at 80% LVR after I complete the subdivision so perhaps I can try this:
1. Build one unit and either sell or rent and hope for equity increase
2. From point 1, obtain enough equity/cash to complete the buildI'd prefer not to try to sell off the plan as at the moment I want to keep them to rent.
Cheers for the advice.
Thommo
Sorry Thommo
But i have to disagree with Marjac.
I believe you would get 90% lvr if done correctly.
I think the enquiries have increased simply because very few lenders left are doing development deals of any kind.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thanks Richard,
Against the trend I got 97% LVR for the property in the first place, in July this year, so you never know..
FYI – This is my PPOR. Finance with Westpac. Property purchase price was $280K.
Thommo
Ok might have an issue there as Westpac wont do 3 properties on the same Title and unlikely you would get separate land Titles until the buildings are constructed.
LMI isnt going to be cheap depending on the total loan amount.
Cheers
'Yours in Finance
Richard Taylor | Australia's leading private lender
Ditto to Richards comments. I wanted to change my two IO investment properties that I have/had with the CBA to their MISA account. I'm paying 6.66% too but the jargon I was fed trying to tell my local manager that it's not a true offset account (ie minimum amount must be withdrawn for use, etc) had me talking to a brick wall. I'm not blaming the staff at CBA. The girl I spoke to would have been no more than early twenties. When I told the CBA that the NAB were offering me a fully transactional offset account at 6.49% and will waive the first years fees they weren't in the slightest bit interested!
Cheers,
Gatsby!gatsby wrote:Ditto to Richards comments. I wanted to change my two IO investment properties that I have/had with the CBA to their MISA account. I'm paying 6.66% too but the jargon I was fed trying to tell my local manager that it's not a true offset account (ie minimum amount must be withdrawn for use, etc) had me talking to a brick wall. I'm not blaming the staff at CBA. The girl I spoke to would have been no more than early twenties. When I told the CBA that the NAB were offering me a fully transactional offset account at 6.49% and will waive the first years fees they weren't in the slightest bit interested!
Cheers,
Gatsby!Yep, their a pleasure to deal with
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
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