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Can bank lend full amount of lvr if two build projects same time

Discussion in 'Property Finance' started by robi, 30th Aug, 2015.

  1. robi

    robi Active Member

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    Hi I am having 2 land and home constructions in a months time both seems to settle at same time, I have asked my broker he said bank will only lend 70% of total value if a construction is in process . I have only limited equity so what's my best plans to build both in 2-3 months delaying after draw down or buy land any pay interest only till I finish other or change another bank for 2nd one please advise
     
  2. Mick C

    Mick C Well-Known Member

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    There's no restriction on LVR for having "multiple projects" unless you placed both deal with a smaller lender and some do have a max LVR based on "each client's exposure"

    Im presume a build of 3-4 units/townhouse for each project..and presume you have the servicing can't see why can't go for 80% or even 90% each.
     
  3. robi

    robi Active Member

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    No it's with big 4 Banks, The Frist one is in Melbourne and the other is in Sydney, which fixed price contract from buldier, the bank says cannot lend only 70% lvr to avoid risk of default by the buldier , so I was not expecting last minute suprise when the other project comes on board in next month for settlement of land
     
  4. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Are they with the ANZ? The ANZ has a restriction of 70% LVR on 2 or more properties, which also suggests they're cross collateralised given they're not in the same location. The other possibility is they're in the CBD or close to it where other LVR restrictions can apply.

    Like Mick, I think 90% should be quite possible, but it looks like the approach to the finance is wrong on several levels.
     
  5. robi

    robi Active Member

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    Yes it's Anz
    What shall I do , shall I use the preapproved one for 90% and move to other lender for the second one which is settling in 2 months time , I was told by my broker after few drawdowns on the first they might lend 90% is it true ?
    And they have already did credit check on 2 nd property as its was due to settle 5 months ago which has been delayed
    Please advise
     
    Last edited: 30th Aug, 2015
  6. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Unless serviceability is a problem, or they're cross collateralised, I can't see why they wouldn't go to 90% on both as two separate deals. Your broker needs to be giving you better information, or you need to be asking more questions as to why there's a problem.

    Settlements are late all the time for construction. Not much you or the bank can do about it, you've just got to work with it.
     
  7. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Easy - just move onto another lender that will allow a higher lvr.

    If you service with ANZ you should service with the others.

    Cheers

    Jamie