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Some good news for financing Granny flats

Discussion in 'Property Finance' started by Marty McDonald, 1st Oct, 2015.

  1. Marty McDonald

    Marty McDonald Mortgage broker Business Member

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    Hidden in an update from ANZ about changes to modelled estimate valuations for some high end suburbs we get this.....


    Granny Flat Update

    Currently, residential properties with “Granny Flats” are treated as multiple dwellings (RMDS) with a maximum 70% LVR.

    Policy Update: Residential properties with “Granny Flats” are now to be treated as standard residential property (RSTD) with standard residential lending criteria and valuations policy to be applied.


     
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  2. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    About time - this was quite an annoying policy with ANZ in this regard.
     
  3. jins13

    jins13 Well-Known Member

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  4. tobe

    tobe Well-Known Member

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    They are marketing to the owner of a property. they hope there is enough equity in the property so the bank doesn't need a deposit, the client can borrow the lot. the banker will first borrow/drawdown at least 5% of the granny flat price to pay the builder so they can get started.
     
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  5. jins13

    jins13 Well-Known Member

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    thank you and yes that's correct. I contacted them and pretty much that's what it was., but surely there are better contruction loans than anz
     
  6. tobe

    tobe Well-Known Member

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    ANZ are pretty good at construction actually. Not too many fees, decent rate.
     
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  7. Hasan

    Hasan Member

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    I was just wondering, to finance a granny flat, is it possible to top up the current loan as cash out in a split account, given the equity and serviceability is fine?
     
  8. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Yep, depending on the current lender, LVR etc.
     
  9. LifesGood

    LifesGood Home Building & Development Consultant Business Member

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    Great news, thanks for sharing.
     
  10. jins13

    jins13 Well-Known Member

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    But aren't ANZ bad for serviceability and would mean I need to move my loan to them in order to obtain the construction loan to build the granny flat?
     
  11. tobe

    tobe Well-Known Member

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    You would have to have a security with anz for them to lend you for the granny flat. That would usually mean the house you are doing the granny flat on, but not necessarily.
    ANZ only use 75% isstead of 80% of likely rental income, which makes them not great for investors. But they have similar serviceability calcs to most and still use negative gearing. Speak to a broker (like Marty who started this post) and get an idea who would be best to use for granny flat construction.
     
  12. Watson1

    Watson1 Well-Known Member

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    ANZ negative gearing is laughable... 95% of the time I get the 'no benefit' when I use their calculator. Then they also split rental/negative gearing 50:50 for couples regardless of ownership and force you to take out a mandatory credit card... The credit card alone will reduce your borrowing capacity by around $30k.

    Not sure if it is still the case but a while ago I queried about the use of granny flat rental income, they said if we were to use the rental the max lvr is 70%, however, if the rental income was not required the lvr is standard.
     
  13. jins13

    jins13 Well-Known Member

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    After talking to my broker, it's a no go for me for this option. It would have been nice to complete two granny flats on two properties I have atm but just not for me atm.