Hi all
As you all know finance is one of those things where you never know if there is a better option for you out there somewhere, and this is the thing i am trying to investigate.
Currently myself and my fiancee have our own home which is worth 250k, we also have a block worth around 85k. The house we owe 160k and land owe 80k, so we hae about 95k in equity.At the moment we have 2 seperate loans, both principal and interest.
What we want to do is build units on our land and then onsell enough of them to own the last one or thereabouts.
What i am wondering is if there is a loan type more suitable to us for this kind of thing, or wether we should consolidate the two into a line of cred to the full value of our abilty?We dont have any other debts either to date and we earn around 90 to 100k combined. Our house is only 3 yrs old also. Have i forgotten anything?
So if any finance guru’s have any suggestions, that would be much appreciated. Thanks heaps.Scott and Michelle.
Scott,
You’ll probably find that your current loan allows for construction. If not you could refinance to one that does. If you are building more than 4 units, you may have to use a commercial lender though.
Regards
AlistairYou don’t really have any equity in the land. Depending on your postcode, and I’m guessing by property price you are rural, you may be able to borrow up to 90% of your current property, so an additional 65k in your home loan, and then get a further construction loan for the land. You would need to access the 65k or thereabouts in your house to leverage the LVR down.
As for construction loans what is the postcode, the construction cost, and what do you plan to build?
I would not suggest a line of credit, your current loans are not going to benefit from it for any reason. Remember a line of credit is a vehicle for a specific purpose, not construction, unless you want to keep leveraging the money out again – do you? Lines of credit come at a higher rate so ask yourself, is it necessary?
Liz
Mortgage Lender
1300 780 826It really depends on the current rate you are paying on your p&i loans and you may also be able to increase the loan amounts with you current lender. You would probably have to do a construction loan on the land before you start building. How many units are you looking at building and have you run what you want to do with your current lender?
There is also some great loc’s out there. The one that won Money Magazines Best equity line of credit has no ongoing fees and I think the rate is around 7.09%
Mobile: 0425 358 293
You must be logged in to reply to this topic. If you don't have an account, you can register here.
