Browse Forums Home Finance 1 Jul 12, 2010 10:20 pm Hi there, I'm fairly new to this forum but have found it really handy already and thought some people might be able to help me out with their experiences with owner builder loans and any issues they had. We've just bought our block of land and are considering owner builder'ing in a year or two but have heard a number of things about requiring money up front for each stage before the bank will loan it back to you at completion of the stage. Is there any easier way of doing this or organising the loan? Re: Owner builder finance. Experiences? 2Jul 12, 2010 11:17 pm Have a look at the Owner Builder section of the forum, most of us OB's have discussed how we got finance for our builds. See if that answers all your questions, and if not, post a question in the relevant thread and we will help. No point us all reiterating whats already been said and doubling up You might find some other things useful in that section too in regards to OBing Custom European Cabinets - Melbourne Kitchen Specialist PM for business details as website currently being updated! Our Crazy Owner Builder Journey! Re: Owner builder finance. Experiences? 3Jul 13, 2010 11:10 am As a general rule most lenders do not lend to owner builders unless the land value alone is sufficient to secure the loan (e.g. your total loan is no more than 80% or 90% of the land value). There are a few lenders that allow owner builders to borrow up to 80% of the value of the land plus the cost of construction. Qualifying isn't easy, you would be required to have around 20% of the construction cost in "back up funds". The guidelines for this are too complex to explain in a forum post. Re: Owner builder finance. Experiences? 4Jul 14, 2010 10:00 pm Bam, I had a look through a number of the owner builder posts but there's a fair bit of time sifting through page after page of the longer ones and I couldn't find much relating to loans. I'll come up with some more specific questions when I get a bit more of an understanding about it all. Thanks JB, we'll be looking at lending around 70%-80% of the total value of the land/construction. I've had one of the banks tell me we can do it lending 80% but they require you to pay the stages up front before re-embursment. I'll check out your links for some more details. Re: Owner builder finance. Experiences? 5Jul 15, 2010 10:01 am Yes just make sure the loan is setup correctly from the beginning and you will be streets ahead! The worst thing that can happen is that you run out of money part way through construction. There are no prime lenders that will use a partially complete owner builder property as security for a loan. What does that mean? If you run out of funds you may be forced to take out expensive private finance to complete the home. Be careful! Re: Owner builder finance. Experiences? GREAT IDEA 6Aug 12, 2010 3:15 pm I just want to say, I have started building my own home. i thought that Owner builder was not possible and have experienced like others the disappointment from the banks when you are advised they can not help. How i got help, was through Intellichoice Finacial Services. They have a program that allows you to borrow on the end Value and not the land Value. The team there are very professional. This has made our dreams come true and we start our build in 3 months. It takes a little time to get the lending but we were just thankful we were able to start such a project. Re: Owner builder finance. Experiences? 7Aug 12, 2010 6:23 pm We have just experienced the first disappointment with banks only wanting to lend 60% of the final value Pammerz, was it your experience that intellichoice were happy to lend 80% of the finished value? Re: Owner builder finance. Experiences? 8Aug 13, 2010 9:51 pm You should be able to get 80% of the total cost, being the land value plus cost of the project, as long as you have a small buffer incase you go overbudget and have full income evidence. You just need to apply with a lender that accepts owner builders. Most mortgage brokers should be able to help you. Re: Owner builder finance. Experiences? 9Aug 16, 2010 4:50 pm Thanks jb_money. I have contacted a few brokers as well as lending managers and I'm consistently getting the response that they won't lend more than 60% of the completed value. We need around 80% and have equity in our land as well as that buffer in the bank. Any tips? I'm keen to hear from anyone who has dealt with intellichoice. Thanks! Re: Owner builder finance. Experiences? 10Aug 26, 2010 9:05 am Hi Meg, Intellichoice are the finance specialist we went through. They help us aquire our funds and we were able to build our ghome based on the end value. We had savings in the back and we didnt really wanna touch all of this money. We aquired finance based on the end Value, we had paid off some of our land loan and then took the equity out of what was repayed and used this also. The lady who help us was amazing. No harm in giving them call or looking them up on the Internet. You have mandatory building inspections and privately engaged building inspections. The difference between the two comes down to inspecting the building so it's safe and… 3 18063 you were just referred to get advice from your solicitor. This is a legal matter. Separately, why would you use a buyers agent for a house and land package? 3 56262 |