Finance on land and construction

Discussion in 'Loans & Mortgage Brokers' started by klabat, 27th Apr, 2019.

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  1. klabat

    klabat Well-Known Member

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    4th Jul, 2015
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    Australia
    Hi all,

    I am wondering when it comes to a land and construction build.

    If the land settles in the next few months and you have the building contract, approved plans, specs list etc. would this be enough for land and build finance?

    What else is needed? Does the land settle first? and is the finance based on the land first or as if complete valuation
     
    klabat, 27th Apr, 2019
    #1
  2. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    14th Jun, 2015
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    Location:
    Gold Coast (Australia Wide)
    we would that sort of deal as ONE

    the first progress payment is to buy the land.

    end finance is based on as if complete val.

    This set up limits the risk of settling the land, and then some months later getting a poor val on the end product, sometimes leaving a buyer with a dog they cant build on

    ta
    rolf
     
    Rolf Latham, 27th Apr, 2019
    #2
  3. tobe

    tobe Well-Known Member

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    18th Jun, 2015
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    Location:
    Melbourne
    Or the risk of change of circumstances, bank policy as well as valuation risk.

    It’s also just simpler and cheaper doing it as one loan. Less stress.
     
    tobe, 27th Apr, 2019
    #3