Ways to buy & build the dream home

Talinsmum · Apr 16, 2007 5:45 pm

Hi all

I'm just not sure how to go about this process, you see we own our own home - still have a bit owing on the morgage (about 1/3 of the value of the home if we were to sell) - now the plan is to sell this place, buy land & build a new home (this process will cost more than the value of the current house we are in by about $150,000 - $200,000) however personally I'd like to do that without having to sell this house first and put this on the market when the new house is nearing completion (or at least at lockup stage) - you see we don't want to have to rent and move twice...

So any suggestions on the kinds of options for loans we might look into ...

Thanks

Fiona

sneakersss · Apr 16, 2007 5:55 pm

They're called bridging loans.

Couple of links to start you out:

http://www.home-loans.com.au/bridging-home-loan.cfm
http://www.xinc.net.au/home_loans/bridging_loans.html

uncle_ant · Apr 16, 2007 7:40 pm

Hi

Get a good mortgage broker to help you out. They should have experience and understand your situation and be able recommend appropriate banking products to suit you.

We were in the same sitatuion as yourself and our mortage broker made it all happen for us. We went started looking around ourselves and it became a nightmare, as some banks just don't do these types of loans or don't understand what you are trying to achieve.

When I suggested a briding loan to our current bank the response was 'Sure, we can do that. All you need to do is make sure that when you sell your home, that you arrange for the settlement to be on the same day as the settlement of your new home'. You can imagine what I thought...

PM if you would like to know who we used.

Good luck
Tony

Talinsmum · Apr 17, 2007 7:49 pm

thanks guys for your advice, much appreciated....

Tony, I've sent you a pm

Fiona

lancemaria · May 29, 2007 12:03 pm

YSSIM

They're called bridging loans.

Couple of links to start you out:

http://www.home-loans.com.au/bridging-home-loan.cfm
http://www.xinc.net.au/home_loans/bridging_loans.html

can you give me further explanation about bridging loans?

aaurora · May 31, 2007 9:19 am

I am wishing I had of done this, as we sold our home first, moved out and rented, and have to move again into the new home.

The only benefit I could see was that the mortgage would be lower...but paying rent more than makes up for that :roll:

Yak_Chat · May 31, 2007 10:00 am

When getting a bridging loan, beware of the time limits.
Sometimes they are stuctured that if you go over the said payback time they can get hoorribly expensive, so if your building anew house, make sure the timelines are realistic and it allows for those "Unexpected" issues that will delay things.
Steve

perthgirl · May 31, 2007 10:11 am

Hi there

Depending on the equity that you have in your current place, sometimes you don't actually need to get a brigding loan as such! We had alot of equity in the place we have now so the bank was able to lend us the money for the new block and construction based purely on the value of this house and the value of our block.....the benefit of this is that we are not under the normal time constraints of a bridging loan!

What state are you in? My husband is a mortgage broker so he organised it all for us - we are based in Perth! If you need any further information let me know!

Good luck
Nat

3timesbuilda · May 31, 2007 10:12 am

I have posted about an equity loan that may be just right for such a situation.

https://forum.homeone.com.au/viewtopic.php?t=2167

Certainly worth investigation.

3xb