Finance for 1st home renovations

Discussion in 'Renovation & Home Improvement' started by david_fintech, 29th Jan, 2021.

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  1. david_fintech

    david_fintech Well-Known Member

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    The suburb that I am searching into has pretty old house and design. Wifey has a keen pair of eyes and acceptable options have been limited to her so far.

    We start considering buying a old house and perform a major structural renovation including but not limited to reflooring, renovating bathroom and repainting completely interior/exterior. We would want to get these jobs done right after settlement and before moving in while continuing to stay in our current rented place.

    We have been pre-approved for 1.5mil. If we can purchase a house of around 1.35mil, is it possible for me to get an loan of 150K to finance our reno immediately after settlement? If so, do we need to get the full renovation quote from licensed builder before applying for the loan? Given there is no major change for the floorplan, I suppose I don't need to get any council DA approval
     
    david_fintech, 29th Jan, 2021
    #1
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Only if less than 90% lvr or using a building contract
     
    Terry_w, 29th Jan, 2021
    #2
  3. david_fintech

    david_fintech Well-Known Member

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    We are currently pre-approved for 90%. Buying at 1.35mil obviously brought us lower than 90% but we will get right back to 90% if we can get the construction loan. Is this possible then?
     
    david_fintech, 29th Jan, 2021
    #3
  4. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    You will need to provide a full building contract with specs and drawings ( if any changes to floorplan - like taking out non structural walls) and progress payment Schedule

    Are you going to be paying LMI or have an LMI waiver ?

    The reason I ask is that if you are paying LMI, you may be stuck with a poor val from the existing lender.

    ta
    rolf
     
    Rolf Latham, 29th Jan, 2021
    #4
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  5. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    It might be better to go 90% LVR from the beginning and use the cash.
    This is something you need specific advice on.
     
    Terry_w, 29th Jan, 2021
    #5
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  6. Lindsay_W

    Lindsay_W Well-Known Member

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    Best engage a good broker to structure this correctly for you
     
    Lindsay_W, 29th Jan, 2021
    #6
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