Construction loan question

Hi just after some thoughts on serviceability for a construction loan.

We currently have land which we purchased in 2009 for $75,000 and is now valued at $100-110,000. We are looking to now build on this land. The builders quote has come in at $246k. We do not have much of a deposit only about $5k as we have recently bought into a part time business. However we are first home owners and will be entitled to $26,500 grant as we are building in regional victoria. Thought we could use the equity in our land towards deposit, but not sure if the banks use that. Our current combined income is $108,000 with one dependant, no credit cards or no loans at all other than the land loan. Any help or tips would be much appreciated. Thanks

Most important question is; Which bank is your land loan with????

Some allows for equity release in the land prior to building, some don't.
Some only allows XX% LVR amount for the land and building separately....some will COMBINE IT.

Regards
Michael

If ur land was bought in 2009 and it values 100,000 now, u have got genuine 5% deposit as equity and u don't have to worry about a thing. Go to westpac, St George, ANZ.

PM if u wanna know anything

Thanks so much for your responses, much appreciated.

My current land loan is with Commonwealth bank.

Just be careful as CBA charges very high LMI premiums on loans that are increases on an existing loan. So if you are borrowing 95% it may actually be better to internally refinance the loan (refinance with CBA) or switch to another lender. Also consider how good the lender is with construction loans, there is nothing worse than having an angry builder because the bank can't get their act together.