Browse Forums Home Finance 1 Mar 26, 2009 4:09 pm Hi, SILs bought a land ($100,000)in the west probably two years ago. During these period, they paid extra repayments ( around $40,000) to the land. They plan to build 2 town houses ( price unknown to me)next year. Since they are still living in rental, the bank said they could borrow 80%. The mortgage of land and construction will be from bankwest. THe bank told them the construction loan/ new combined loan will be : (land price $100,000+ construction price ??)x 0.8. When i heard that, I thought it should be: {(land+ construction price)x 0.8} - $40,000. If not, then the new loan will then count the interest of the repayment $40,000 again?? Can anyone explain ? Thanks helping. nott Spring is here! Hurray! Re: About construction loan 2Mar 27, 2009 9:08 pm I think it depends on whether they actually paid $40,000 off the loan or is it sitting in re-draw? Blog: http://bluemistkids.blogspot.com "Never be afraid to try something new. Remember, amateurs built the ark, and professionals built the Titanic." Re: About construction loan 3Mar 30, 2009 11:43 pm Nott Hi, SILs bought a land ($100,000)in the west probably two years ago. During these period, they paid extra repayments ( around $40,000) to the land. They plan to build 2 town houses ( price unknown to me)next year. Since they are still living in rental, the bank said they could borrow 80%. The mortgage of land and construction will be from bankwest. THe bank told them the construction loan/ new combined loan will be : (land price $100,000+ construction price ??)x 0.8. When i heard that, I thought it should be: {(land+ construction price)x 0.8} - $40,000. If not, then the new loan will then count the interest of the repayment $40,000 again?? Can anyone explain ? Thanks helping. nott Thanks for your PM, nott. Sorry I took a while but I now replied. The biggest challenge will be if you take out a loan and then run out of money - you'll have an incomplete security and lenders do not like this so you can get stuck.… 2 19108 Hi, you've probably already resolved this, however, Commbank will probably pay the funds to you after you send evidence the work is done regardless the change in the quotes. 1 35327 How much are you ahead in payments compared to where the build is at? Have you fully drawn down the loan? 5 11928 |