All Topics / Help Needed! / Financing question

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  • Profile photo of Case07Case07
    Participant
    @case07
    Join Date: 2010
    Post Count: 8
    June 7, 2017 - 2:51 pm

    Hi,
    I’m after advice on the best way to set up an investment property loan.
    I have recently put a deposit down on a block of land and am looking to either build a duplex on it or just a single residents but am not sure on how to set up the loan structure for it.I have a mortgage out on my own property but am not wanting to link the 2 together if possible.I will be using equity from my own property so i am not sure whether to use the same lender or to go elsewhere.Any help or guidance would be greatly appreciated.

    TIA

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    June 7, 2017 - 4:15 pm

    Hi Case

    Normally we would suggest a client access 20% deposit on the land and estimated construction amount from their own equity (obviously if this is not available you may still be able to go to 90% lvr) and then finance the balance of land and construction using the duplex as sole security.

    No benefit at all in cross collateralising the 2 securities so certainly don’t get lured down that path.

    Unsure the lvr you will require on the new construction so difficult to provide further details.

    If you have a reasonable amount of equity then still doable at a sensible rate.

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

    Profile photo of Case07Case07
    Participant
    @case07
    Join Date: 2010
    Post Count: 8
    June 7, 2017 - 4:56 pm

    Hi Richard,
    Sorry i should of added my financial situation.
    Home last valued at $740K around 6 months ago, $460K owing and the block of land is $230K.I have a yearly income of over $150K and my wife $30K.
    I’m not sure on what to build on there yet as i do not know how much i am capable of borrowing.

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    June 8, 2017 - 10:42 am

    Hi Case

    OK cheers for the additional information.

    Equity part of the equation appears Ok but construction amount will depend on potential rental yield.

    Probably going to need a little bit more information (number of dependants, any personal loans etc) to give you an exact answer.

    Course in saying this would probably act quicker than later on the equity release as each day lending criteria tightens.

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

    Profile photo of JaxonJaxon
    Participant
    @jaxona
    Join Date: 2014
    Post Count: 284
    June 13, 2017 - 3:49 am

    Richards is on point,

    to expand Case, study this site and returns and developement projects on the forums and you will work out yourself if its suitable to build a house/duplex/subdivide or if only a build is possible under the planning scheme for your area.

    • This reply was modified 7 years, 6 months ago by Profile photo of Jaxon Jaxon.

    Jaxon | Jaxon Avery – Financial Adviser
    http://www.jpafinancialservices.com.au
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    JPA Financial Services Pty Ltd

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069
    June 14, 2017 - 9:43 am

    Hi Case07

    Best bet is to get Richard to sort it out for you – he does this stuff everyday of the week and has already provided some excellent input.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

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