Servicing a Construction Loan

Hi everyone,

Can someone explain how lenders calculate your capacity (serviceability) to borrow for a construction loan?

Would it be the same as a normal mortgage?

thanks

Arnel

 

Same as normal.

If it's an IP - some lenders will take into account anticipated rent.

 

Oh ok, thanks @James Bond

Follow up question to that. In order to service 1 million dollar loan PP 275k empty block and build 750.

What would your income have to be.

I have a proposal to go 50:50 in twelve apartments that have DA Already.

pp 550
Build 785sqm at 1900sqm.. 1.5mill
Plus other costs and buffer

I was going to bring in s few friends of mine on my side, splitting my share of th 50% into three.

How would we step this up?

The site will be secured by s company that we both have 50:50 stakes in (each have a trust).

Note: have signed for 5 units to be rented to NRAS for 50,000 per annum. Don't know if that make a difference

 

@OSAN Properties

12 apartments will require a commercial loan.

Commercial construction loan works bit different then resi loan

You will need pre- sale
50-65% GRV
need to pay for Full valuation
QS report

 

Please be careful with ventures like this. Remember that it is likely that the more people you bring in the less banks will like the deal and it's quite possible that every member will be 100% responsible for the debt.