Browse Forums General Discussion 1 Sep 19, 2010 4:37 pm We are in the process of getting our home block of land sub divided so we can build another house behind us, there are some questions that I need to know . Firstly how does this affect our current mortgage - it's more like an Equity loan than a set mortgage and is pretty well paid up - because lender currently has our land title as a security, but what happens with the rezoning, surely this creates 2 land titles that are strata titles, we are looking to use the rezoned land as security to get another mortgage to build the second house and might use same lender, but what if we decide to use another lender how does this affect things in regard to the original title do we get old title deed back and then have to supply them with the strata title that we are living on until such a time when that loan is no longer required. Can somebody offer us some information? Re: Rezoning a block and building on it 2Sep 19, 2010 10:21 pm We have subdivided, our mortgage is with a bank, and then when we subdivided it created 2 separate titles. I dont know the official word for it but the bank is still noted on both titles as an interested party, but technically one of the titles is mortgage free, the mortgage we have is on the title with the house on it. We are very soon applying for our new separate loan to build a house on the land with another lender, and have been told this should not be a problem, that the interested party will just be changed from the current bank to the new one. I did actually speak to our current bank about removing them from the title of the land but they said it is just easier to do when we arrange the finance to build the new home with the new lender. We are not quite there yet but hoping it will be as easy as we have been led to believe. Hope that helps.. Re: Rezoning a block and building on it 3Sep 19, 2010 10:33 pm IMHO: It does depend on the amount of equity you have. For eg - lets say that your land with the existing house is worth $500000. You took out a loan of 300000 and now have only 150000 left. Since you want to subdivide, the empty block of land created by this subdivision should be worth say $200000. this means that your house and land should be worth the remining $300000. Since this amount is large than what you currently owe, the bank should be happy in keeping your smaller block of land with house as security for the remaining $15000 owing. In other words, the new land created by the subdivision should essentially be mortgage free. Personally, I would get a sworn evaluation and present that to the bank to boost your case. Suburbia is where the developer bulldozes out the trees, then names the streets after them. Re: Rezoning a block and building on it 4Sep 25, 2010 3:21 pm Thanks for the help, it seemed so daunting a task, the property we live on currently has nothing owing as it is an equity manager type of account, but feel that instead of using the equity of this loan to finance the sub division, think we could get a better deal from another lender interest wise and also could negative gear. If we use a property manager to rent out the new house etc are these costs able to be negative geared including the mortgage repayments? 4 3594 Give Jonathan a call. Tell him you know me. He is in my opinion the best surveyor I have ever worked with. His number is 0425 285 622 All the best Simeon 3 9191 No, not yet. It’s currently being assessed by our building surveyor 4 5509 |