Loan structure

Discussion in 'Loans & Mortgage Brokers' started by alexluu, 1st Sep, 2020.

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  1. alexluu

    alexluu Member

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    Hi all,

    Just need an broker opinion on my situation.

    I am a father in a family with 3 kids. Going to settle our 3rd IP in Tas.

    The IP is able to subivide into another lot and building up in the back. Builder quoted to build a 3br around 140m2 is $300k with drawing and other fees.

    currently we got 1.33 mil value of my 3 IP, and we owe $1 mil home loan.

    Question is how likely the bank happy to fund me the project. Providing the market price when the building finish is $450k (so $150k equity)
     
    alexluu, 1st Sep, 2020
    #1
    fritzsticker likes this.
  2. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Welcome to the Zoo

    Equity sounds fine as long as the 300 k build adds 300 to value of portfolio, so 1300 k/ 1630 val = 80 %

    Serviceability, we have no idea.

    ta
    rolf
     
    Rolf Latham, 1st Sep, 2020
    #2
  3. alexluu

    alexluu Member

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    Thank you Rolf.

    Forgot to mention.

    The 1st and 2nd IP is under personal name.
    The 3rd one is under family trust. Is it effect the situation.
     
    alexluu, 1st Sep, 2020
    #3
  4. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    trust isnt an issue for equity, but may lower serviceability a little bit because usually no neg gearing with most lenders, and partial neg gearing only with some lenders

    ta
    rolf
     
    Rolf Latham, 1st Sep, 2020
    #4
  5. Manish1

    Manish1 Active Member Business Plus Member

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    Valuation will be in line i.e. $300k build cost, valuation increase by $300k. LVR will be 80% post borrowing $300k
     
    Manish1, 1st Sep, 2020
    #5
  6. Lindsay_W

    Lindsay_W Well-Known Member

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    That's not always the case, it can be more or less than the build cost.
    Build cost doesn't = value

    If getting an 'as if complete' valuation there is a chance it comes back at $450K and the bank will fund the whole build cost of $300K - Subject to serviceability

    Are all properties cross secured with the same lender?
     
    Lindsay_W, 2nd Sep, 2020
    #6
  7. Manish1

    Manish1 Active Member Business Plus Member

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    Melbourne
    Agree, if you subdivide before building
     
    Manish1, 2nd Sep, 2020
    #7
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