Extracting equity from rural property

Discussion in 'Loans & Mortgage Brokers' started by Nath, 26th Oct, 2021.

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  1. Nath

    Nath Active Member

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    Hello All,

    Will lenders lend up to 80% of a property's value if a rural property like residential or is it more like 60-70%?

    I have a family member with 120acre property with no debt owing, looking into options of equity for investment purposes.

    If it is more than a hobby farm( makes some kind of income) does that change anything?

    Thank you
     
    Nath, 26th Oct, 2021
    #1
  2. Tony Xia

    Tony Xia Structured Loan Advisor Business Member

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    For a large property like that, only a few will play in that space.

    Better if it's not income producing as some banks will treat it as commercial, really depends on what zoning is noted on the valuation report.
     
    Tony Xia, 26th Oct, 2021
    #2
  3. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    does it have a house on it?

    ta

    rolf
     
    Rolf Latham, 26th Oct, 2021
    #3
  4. Nath

    Nath Active Member

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    Thanks Tony

    Any idea on lenders in that space and the percentage of the value they would lend to?

    Zoning is RU2
     
    Nath, 26th Oct, 2021
    #4
  5. Nath

    Nath Active Member

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    Hey Rolf,

    Yes has a house on the property-PPOR
     
    Nath, 26th Oct, 2021
    #5
  6. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    if its < 50 hectares ( 123 acres) has town power a few lenders will possibly lend on this on resi terms

    ta
    rolf
     
    Rolf Latham, 26th Oct, 2021
    #6
  7. Nath

    Nath Active Member

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    Thanks Rolf,

    The property is 49.19 hectares with all normal residential connections.
     
    Nath, 26th Oct, 2021
    #7
  8. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Subject to Serviceability and navigating the cash out rules for equity release 70 to 80 %, and perhaps even with LMI to 88 but, that will make the cash out pretty hard

    ta
    r
     
    Rolf Latham, 26th Oct, 2021
    #8
  9. Nath

    Nath Active Member

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    Thank you and appreciate the answers
     
    Nath, 26th Oct, 2021
    #9