In the current lending climate, it is very difficult to find a conventional lender to provide development finance with a credit default. Even with no default there are quite a few hurdles to jump. Post covid, as everyone knows thew construction sector has some issues. As every week we are hearing about construction businesses closing. Therefore, i would recommed setting up your finances in a solid position. Also, possibly considering a credit removal company to work on cleaning your credit file. However, this is a mine field of unreliable operators where they take your money then dont deliver as promised. There are some companies that pay on removal of the default as well – i would consider these companies.

I hope this helps.

Colin Kidd

• This reply was modified 8 months ago by  lsn. Reason: error in text
• This reply was modified 8 months ago by  lsn.

Hi Nat,
How much is the fixed price contract? Minus the additional 40k?

Regards
Colin Kidd
Loan Saver Network
http://www.loansaver.com.au
http://www.loansaver.net.au
When the Banks say “no”. We say GO!
m: 0404 362 262

I must re inforce the word contestable, which mean it is contestable if it is another parties fault. Ie the lender, or business who initially put it there. I have successfully been involved in transactions where the CRAA default was removed. But again this default was listed and acknowledged as a mistake by the business who listed it. Which was then removed from clients CRAA file. Paying a bill or loan after it is listed only notes the default as paid. Under the privacy act a consumer has the right to amend incorrect information on their CRAA file.
See http://www.privacy.gov.au/publications/craa.html#3 for more information regarding your credit file, how to amend and access your information.

Regards
Colin Kidd
Loan Saver Network
http://www.loansaver.com.au
When the Banks say “no”. We say GO!
m: 0404 362 262

Just be aware there are different regulations for broking in WA than the rest of the country. They will need to have a WA Brokers licence to write your loans. Occasionally i get the odd referral from clients in Perth, but i refer them on to a WA firm for this very reason.

Regards
Colin Kidd
Loan Saver Network
http://www.loansaver.com.au
m: 0404 362 262

There are a few conditions to think about including:
-Subject to finance: This should be at least 2 week subject to finance clause from the date of final signature.
-Subject to vacant possesion. (if tenanted and you wish to occupy, or if you don’t want the tenents)
– Subject to building inspection.
– Subject to fittings and fixtures remaining.
– also consider and/or nominees if you need to obtain legal/accounting advice, or if you may wish to change the ownership status.

These are the main ones.

If you have any more questions, feel free to ask.

Regards
Colin Kidd
Loan Saver Network
http://www.loansaver.com.au
m: 0404 362 262

Hi Celeste,
Yes, you can do that, but it is what a bank calls a construction loan. There are some benefits and disadvantages of one of these that can push someone out of qualifying.
1. Lender requires the property to be complete (no walls missing etc) prior to starting.
2. Construction must be on a fixed price building contract
3. Difficult for work where you are doing it yourself. (this classed as owner builder.. dirty word to the banks)

The situation regarding no paying interest till you use it is correct, this is the same for Line of Credit and construction loans. Though construction loan payments are usually paid direct to the contractor doing the work, and usually over 5 or more stage payments. A line of credit, you are in control, you write the cheques and assess the work at each stage… The difference between the two is simply available equity. ie doing a $200,000 extension and the property is currently valued at $300,000 with a $200,000 loan owing. This would be a case for a construction loan as the equity is not there. If the property was worth $500,000 with the same situation… then the only other requirement is serviceability.
If the loan is small enough and can service… sometimes a personal loan will work best. Then consolidate this loan into your mortgage at a later date.
Everything here is hypothetical.. Full fact finding, needs analysis and solution identifying needs to be done to suit each persons individual circumstances.
Hope this helps.

Regards
Colin Kidd
Loan Saver Network
http://www.loansaver.com.au
m: 0404 362 262

Hi Daren,

I couldn’t really tell without doing a full needs analysis, but simply based on your data included you would have no problem qualifying for 300k and probably alot more. Of course each lender has a different capacity they will lend to you, but you are in quite a strong position. Other factors to consider:
Cost of future property will determine LMI consideration and their policies and guidlines, which have tighter guidlines on:
Employment
Postcode
etc etc…
But as i said based on your snapshot, you’re in a good position to choose the right lender moving forward.

Regards
Colin Kidd
Loan Saver Network
http://www.loansaver.com.au

Just to ad to the last comment. You will usually require 10-20% deposit for a line of Credit product. Where you can find 100% offset products around for 100% LVR lends. If you were wishing to capitalise the loan payments to the loan itself, in any of these cases the capitalisation with only be the funds you have remaining from the purchase. As you are a First Home buyer, usually funds are limited to savings, and FHOG. Unless you have more equity to put toward the purchase…. for example a parents property. Capitalisation of interest or redrawing equity can only occur if there is equity to draw upon.

Colin Kidd
Loan Saver Network
http://www.loansaver.com.au