Finance for newly built House + GF - Lenders or brokers

Hi,

I've recently built a new house and granny flat in NSW.

ANZ bank told me that an LVR of 70% max is what they can lend, because they treat it as multiple dwelling and there is an inherent credit risk.

The house is in wife's name and she is on $50k income.

I'm after 80% lend approx $420k on $525k valuation.

Expected rent $650 for both house + GF.

Any guidance towards bank or Mortgage brokers specialising in these sort of projects would be helpful.

I intend to repeat the process with the borrowed money.

 

These sorts of projects aren't particularly difficult, but the ANZ is probably the worst choice of lender for the reason you've discovered.

This isn't a scenario that is any sort of 'speciality', but like any lending it's a matter of matching the right lender and product to the borrowers circumstances and requirements.

 

Like Pete said lots of lenders will do this.

Your adding another layer of complexity ‘cashing out’ the completed build for the next one. Better to supply the plans and get the loan drawn as you finish rather than after.

Are you a registered builder? Or will you have a fixed price building contract from a registered builder?

Not having a fixed price build contract adds another layer of complexity.

 

Cash out to do a construction project will be a hurdle with lots of lenders. Also taking granny flat rental that doesn't have a history is also a challenge with some.

Id suggest a lender who doenst have an issue with cash out over $250K as the starting point.

 

Thank you all for the response. I knew it was doable and that was the basis of starting this project with own funds.

The funds were released from my PPOR offset account for this project. So I'm taking my cash and parking it back into my Offset account for future project. That's how I built my PPOR as an owner builder and then cashed out with ANZ and parked the funds in their offset account.

I'm not a builder, but I have a Fixed fee plus cost basis arrangement with an upcoming builder. So it worked well on this project. Hence I want to repeat the process.

 

The lenders wont see a new loan against this property that way though. They will see it as "cash out" and will want to know what you intend to do with the funds.

 

Not sure I've followed this correctly?

You paid cash to do the build by drawing from your PPOR offset?

The build is finished so you want to mortgage the new build to pay back your cash into the offset?

Then, repeat down the line using the offset cash again to build and re-finance once the next one is built?

Does that mean the interest on the new finance can never be tax deductible as you essentially pad them off originally by financing the build with cash?

Sorry if I've miss-read it or got the wrong end of the stick, my coffee hasn't kicked in yet.