Hi,
If you buy a property with the intention to do a massive renovation how do you go about securing renovation funds or do you need to front up the cash yourself?
You will need cash or borrow from another property as you will only get a max of 90 to 95% of the value or purchase price of the house you are buying.
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
Are you planning to do the renovation yourself?
Some lenders will give you the money for the renovation (similar to a construction loan), as long as you have a fixed price building contract. That way you might also get the bank to do a valuation based on the "completed" value of the property.Do you know what lenders will provide this? Is it common enough procedure? I had planned on project managing the renovation with quotes all obtained prior to commencement is this adequate or it needs to be a builder with a fixed quote?
I have heard NAB may be open to renovation lending.
Not sure where Ductster heard that as NAB are certainly not a lender who will lend without a Fixed Price Contract.
Richard Taylor | Australia's leading private lender
From my experiences and dealings, you must have fixed price contract as the quotes can always blow out whereas a fixed price contract gives the banks the security of knowing that the job will come in at budget (and hence the lending is safe).
Owner builder jobs will generally only lend to about 60% of finished value (St George Bank is my suggestion of who to approach).
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