Can you get subdivision costs included in Loan?

Hi guys and girls,

Just seen a property that can have the back cut off for subdivision and was thinking a quick subdivision and sell-off, then pay down the loan with whatever the land sells for (approx $90,000+) from previous sales.


My approx borrowing power is $225,000? I have put an offer in for $190,000 and was wondering if it is possible to get the subdivision costs (approx $20,000) included in the loan or if this is even possible with such low borrowing capacity.


Cheers

 

Hi MJ23

If you have sufficient income to service the debt and enough equity in this or other properties then you can borrow funds for anything. Of course if this property is the sole security then you can only borrow against the purchase price / valuation whichever is lower.

Cheers

 

I assume you're asking can you borrow the maximum for the purchase, assuming it's an investment 90% inclusive with most lenders, 10% deposit plus costs and then borrow the additional cost to subdivide? Won't happen I'm afraid as a secured as that will then push the LVR above 90%.

Depending on how much you expect to spend on the subdiv you could get an unsecured loan however this would come with a hefty interest rate but may be worthwhile if you've done the numbers.