How does this work…
I wish to buy a house at auction. I also with to renovate it….I have money to cover 20% deposit plus costs…Can I get a loan that includes my reno costs? Can I go to 90% or 95 T so that it includes reno costs…..Or do loans only cover the purchase of the house???
If its a auction? We are expecting it to go for under market value due to mortgagees auction maybee (if we are lucky) . It is possible for tha bank valuation to be higher once purchased and thus increase the loan amont ???That migh hel cover reno costs….Or does the bank valuation go on the price you purchased at??
Anyone have any experience/ knowledge they can share?????By the way.. If I cannot fund the reno using the loan… how have people funded their reno’s…….Any tips or hints..??[inlove][inlove][inlove]
Snowflake
You generally cannot borrow more than the house is worth. If you have the money for 20% now, why not borrow 95% and keep some money for renovations?
If you buy at auction, then the price you pay will be market price! It may be hard for you to get a valuer to value it more in the short term. If they do, banks will generally want you to wait 3-6 months before they will increase you loan. BUt you could always refinance with another bank and do it that way.
Terryw
Discover Home Loans
Parramatta
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Hi TerryW
I should have explained my querie more clearly….
I have the money for the reno. I was hoping to finance the new house (Deposit plus costs) from using the equity in my current IP (draw on equity from a property I have just done reno on).. but I was told from the broker that:
1. He can get a preapproval so that I can purchase the new place (at auction)
2. Wont kow how much equity I can draw on from existing property to finance this purchase until the full refinaince valuation is known of the house.. then he can tell me how much I equity I have to spend on purchasing the new place….My problem is….I have a general idea what its my current place is worth ($300,000). THat should give me enough equity to finance the 20% plus costs on the new place.. BUT WHAT IF THE VALUATION comes back at say 30,000 less or something ater the auction?? Then I will have gone to auction only to find out that I the refinance value is less than I thought and not have enought to cover the purchase costs…….ARGHHHHHH
Sorry Still not sure whether i am explaining this o.k…..Anyone???
Terry you have been a big help to me as you always answer my MAD and silly posts… thanks again in retrospect…..
[inlove]
Snowflake
Ok, you should probably get the valuation done on your property first, otherwise, you may come in short of funds if your valuation comes in lower.
I spoke to a loan assessor today at a major bank, and he said 80% of valuations for loan increases and refinances were coming in lower than expected.
Terryw
Discover Home Loans
Parramatta
[email protected]
Sign up to my mailing list.
Just send me a blank email, with “subscribe†in subject line.Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Terryw
Can I request the broker to organise this?? How do I do this?[inlove]
Snowflake
Yes certainly your broker can organise this for you.
Just remember that if you repay your loan in the first 12 months maybe even 18 months your brokers commission will be clawed back so he might not be too keen in assisting again.
Richard Taylor
Residential & Commercial Finance Broker
**NODOC loans from 7.14%**
Licensed Financial Planner
http://www.yourstatefinance.com
[email protected]
Ph: 07-3720 1888Richard Taylor | Australia's leading private lender
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