Browse Forums Home Finance 1 Nov 22, 2010 9:39 am Earlier this year we purchased a block of land with 20% savings, 80% bank loan. We need to borrow a little more to finance the construction of our house, about 20% of the build contract. I am assuming (without refinancing) our only option is to get a construction loan with the same bank. Is this correct? Or is it possible to have a loan for the land with one bank and a separate loan for the house with another financial institution? DKP Re: Loans for land and house with two banks - possible? 2Nov 22, 2010 9:41 am i don't think it would be possible to get a home loan with two back as the other bank needs your title and it can not be shared. The only possibility may be to get an unsecured personal load but i would hate to think what the interest rates on that would be. Re: Loans for land and house with two banks - possible? 3Nov 22, 2010 9:47 am B Star is correct - only one lender can be the main mortgagor - and no lender wants to have a "second mortgage". This means should something happen and you default the first lender gets the lion share of the repossession funds whilst the second lender gets what ever is left over. The only time a lender is willing to go second is for Defence Force Housing loans, very rarely will they do it for a normal lending situation. Some things are worth waiting for. Re: Loans for land and house with two banks - possible? 4Nov 22, 2010 10:05 am If you are funding the majority of the build yourself and only need to borrow a small amount then maybe you should apply for a line of credit with your bank. The interest will be a bit higher than a mortgage (ours is an extra .7%) but this way you avoid having to have a construction loan and you remain in control of the finances. In our case, at the completion of the build, we will refinance and roll the line of credit balance into our mortgage account. Speak with your bank - I am sure there will be solutions. Re: Loans for land and house with two banks - possible? 5Nov 22, 2010 10:33 pm Thanks all. I don't really intend to have a separate loan or a line of credit. I just wanted to know if it was possible, in which case I may have had some bargaining power to negotiate a better deal. DKP The price you're seeing for a high-spec 2-storey home in Perth sounds steep, but unfortunately, it's kind of the norm these… 8 7872 "is it exempt or do I need to get permission from council" Call your Council and ask them 1 1559 yes it is possible but watch for noise transmission, decouple as best you can. Maybe wider top and bottom plates with 70mm studs to allow the cabinet to be recessed fully 1 6636 |