I would like to buy some vacant land and build a house on it. Have not got plans done yet, but will get them drawnup and get some quotes from builders if finance seems doable.
Currently I am just servicing my existing loans, so may sell something to buy this one, but wondered if I could get a low doc or some other sort of stand-alone finance for either land only or a construction loan, without paying exorbidant interest rates (I have plenty of equity for at least 10% deposit) on land, but this is presently locked up in a fixed interest rate loan with ING (4 years to go).
Still don’t have figures for house and land values: have not negotiated with owners yet: want to have finance sorted first.
So: in short: lo doc loans for land only/construction, and accessing equity in a fixed term loan.
Suggestions welcome“If you look long enough into the void the void begins to look back through you.” Nietzsche
If you are currently only just servicing your current loans then a construction loan with no rental income might not be the wisest move.
However if you have the equity then you may be able to capitalise the interest until it is rented….still may be too tight. With CG being in a slow or stagnant phase it may not be the time to stretch yourself too far.
You really need to have someone in the lending or broking game run some figures that may help you make your decision.
Cheers,
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Dallasm, vacant land is not a security many lodoc lenders will accept. Also, the few that do, will limit the LVR to generally 80%
I know of some that will do 90% on vacant land as lodoc, but will charge higher rate/fees, something you said you werent prepared to do.
I tend to agree with Simon, if you’re pushing your limits with servicing currently, going further into debt wont help. Also, try to increase your equity position to 20-25%, this will open up your options when you are ready.
Regards,
RobRob Whyte
Certified Mortgage Consultant MIAAPrincipal & Licensee
The Mortgage Gallery
e [email protected]Winner 2004 National Office of the Year!
Accredited with over 27 lenders nationally. 15 years experience in commercial and residential lending, ask me anything, if I dont know, I’ll find out!
Thanks, much as I expected. In that case I will definitely sell first to ease serviceability, and that should give me access to>20% deposit and settlement costs. Still will likely be exceeding my serviceability though, unless banks will consider rental income from completed project as well. I’m guessing there aren’t lo doc construction loans.
“If you look long enough into the void the void begins to look back through you.” Nietzsche
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