Sale and lease back or extended settlement

Hi Streaker,

I just to clarify, you want to sell your existing property and I’m assuming, do a long settlement with the purchase, settle on vacant land and build, continue to live in the existing property until the construction is completed, then move into the new property and settle on the sale of the existing property?

If this is the case, Im not aware of any lenders who would even allow you to settle on the land and start the construction UNLESS the existing loan was factored into the overall servicing. Some may consider it if you have an unconditional signed contract, but only if the window was less than 6 months. I will do some home work and reach out to a few lenders to see if this is even possible, but I just want to clarify the above is what you are hoping to achieve.

Bridging finance would probably be the only way you would have any chance of doing something like this, however, bridging loans generally have a strict 12 month turnaround and the peak debt (existing debt and new debt combined) MUST be within 80% LVR based on combined property values. Lenders only do servicing on the end debt also, which makes things easier.

The only way I think would allow this to happen is to sell and settle your existing property. Try and arrange to rent the property off the new owners for 12-18 months and clear that home loan. Then apply for finance to buy land and build, then once complete you move in, the existing property gets rented out to someone else or the new owners move in, but this is probably not very ideal for both parties and quite difficult to do these days.

Once I have clarified the above, I can do some homework for you and see if anyone might be able to assist.

Regards,

Chris Berry – Find A Better Rate Home Loans – 0477 212 840