All Topics / Finance / Personal v Business Lending Banks view

Viewing 4 posts - 1 through 4 (of 4 total)
  • Profile photo of TdaviesTdavies
    Member
    @tdavies
    Join Date: 2011
    Post Count: 6
    June 7, 2011 - 6:39 am

    Hi

    I have always banked with the same bank.  I am about to embark on a project of a three townhouse build.  My mortgage advisor has just advised me that my bank has just changed their policy, so all contructions of three dwellings or more are now classified as business, and hence I need to get business finance.  Does anyone know of any banks that will provide funds for a three dwelling development under residential lending and hence residential rates?

    T 

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    June 7, 2011 - 11:04 am

    Hi T

    You Broker maybe correct although i must admit there are still a few lenders that will consider the deal as a residential application,

    I have a couple of such deals on my desk at the moment for forum clients and we have obtain 80% lvr at sub 7% without too many fees or charges.

    Maybe your Broker is not too well versed on small development / construction deals.

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

    Profile photo of Alistair PerryAlistair Perry
    Participant
    @aperry
    Join Date: 2004
    Post Count: 891
    June 8, 2011 - 1:41 am

    Hi T,

    With a 3 unit development you should have the choice of a resi or comercial contruction loan. While it is the more expensive option, in many cases its better to use a commercial loan, it is more expensive, but you get the benefir of capitalising interest and there being no serfvicing calculation. There are also differences in the way valuers are instructed, which affects the valuation of the land (resi lenders value the land as is, commercial lenders will want a "project related site valuation" which is more a valuation on the project than the land and is generally a higher figure. The result is that you can generally borrow more through a commercial lend that a resi lend, unless you are willing to pay mortgage insirrance on the resi loan.

    Regards
    Alistair

    Profile photo of Mick CMick C
    Participant
    @shape
    Join Date: 2010
    Post Count: 1,099
    June 8, 2011 - 2:16 pm

    Just ask your broker…. make sure his accredited with all the banks and not just a handful of them, one that comes to mind is ANZ- done it in Jan ; don’t think they have changed their policy on this since then….LVR might not be as flashy though-around 70%..
    But there are def a good choice of lender that will do it at 80% + of course you have the commercial team that will do anything pretty much.

    Regards
    Michael

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

Viewing 4 posts - 1 through 4 (of 4 total)

You must be logged in to reply to this topic. If you don't have an account, you can register here.