Loan advice needed for knock down rebuild

Discussion in 'Loans & Mortgage Brokers' started by Vishh, 2nd Aug, 2020.

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  1. Vishh

    Vishh Well-Known Member

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    28th Jun, 2019
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    Sydney
    Hi All,

    Just looking at a property for knock down rebuild. Haven't put offer yet. Thought it is wise to check in this forum from loan perspective.

    Property is unliveable. Landvalue is $520k. Have more than 20% deposit. Plus another 50k as buffer.
    Both of us work. Have borrowing capacity of 850k.

    Will any bank give loan considering land value + construction?

    Thanks,
    Vish
     
  2. Terry_w

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

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    Some would lend on land value, then contract for construction. Others may not lend at all.
     
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  3. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Suggest u have a chat with a good broker/banker

    On the VERY limited data, cant see why its not doable ?

    What be your concern ?


    ta
    rolf
     
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  4. Jess Peletier

    Jess Peletier Mortgages, Finance & Property Strategy Aust Wide Business Member

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    Land value only unless you've got a contract to build. Can do a pre approval for the construction with most lenders.
     
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  5. Vishh

    Vishh Well-Known Member

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    Thanks. No major concerns. I have heard many scenarios which was new land + home packages with bank loan. Havent read many knock down rebuild stories with Bank loans. So just checking whether it is doable. I will check with financier for more details.
     
  6. Vishh

    Vishh Well-Known Member

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    That is a great point. Thanks. So I have to be mindful of my offer. If I offer too much than the land value by NSW website, then I may deplete my buffer. :)
     
  7. sumterrence

    sumterrence Well-Known Member

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    I don't know about other 2nd tier banks but for normal big4 a knockdown rebuild is not a problem. You have two options either do it with a fixed price contact or you obtain multiple quotes from tradies and do a cost plus loan.
     
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