Hi guys,
It has been some time since my last post but was hoping some of the finance savvy guys could answer my questions.
I have recently completed the sub-division of an IP and have the rear of the block as vacant land. If i choose to hold this for the time being, will the bank lend me funds against this, as it would a land + house?
Any thoughts would be great
Thanks
Is it on a separate title? If so then yes. If no then still possibly yes.
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Thanks Shahin,
The land is on a separate title, so that is good to hear.
thanks again
In that case yes you can do that. Just be mindful that if you are going with to do that loan with your current bank and you haven't advised your current bank of the subdivision then you will be in breach of your loan contract.
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Subject to servicing still…
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
yes, most likely as a LOC type of loan unless you were going to build. Beware though that the bank might continue to value your home at what it was valued at originally without the land being subdivided off. Your home would obviously be worth less now that it has lost some of its land content. But they might not readjust this immediately if you have just completed your subdivision, so if you are going to use the equity in the land to leverage into another deal be wary that you might have a shortfall in funding if they chose to revalue your home. So try and and obtain a valuation on your home before you lend money so that your not caught short with the bank saying…. " you owe us 30k so your loan is within our policy LVR limits." and you have just used that money as a deposit elsewhere
If the land is unencumbered then your options are even greater.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi again guys, thanks for the comments.
Tom, you are right the bank does know about it as their authority was given before the sub-division was finalised.
Richard – the land is unencumbered, are you able to quickly jot down what some of these options would be?
Thanks in advance
To reiterate what Terry stated above, can you service the additional loan with your current income – obviously there will be no additional income from the vacant land. Further, what are your plans with vacant block over time?
Hi BM
Without knowing all the facts and figures i would be looking at an equity loan or similar to enable you to finance all the items you do not want included in the Fixed price contract which you can save money on my outsourcing or buying yourself i.e blinds, landscaping, fencing etc.
That way you can get the Builder to quote for just what you want him to build and can negotiate a better price for the extras by paying cash.
As i say without the full facts can't summarise much more.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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