Browse Forums Home Finance 1 Oct 17, 2011 8:06 pm Hi all, am about to put my house on the market and refinance with a bridging loan. I am seriously considering buying a country/bush block. I realise it has to have a "home" on it to qualify as a "home loan" (at home loan interest rates) but I would like to buy primarily for the land. I would then look at doing a owner builder project over time. Sooo... what do I need on the land to qualify as a "home"...? I see some blocks for instance with glorified sheds serving as housing. Would something like that get accepted by the bank for home loan approval? Advice and ideas welcomed Re: Home Loan - define home - looking to buy rough shack 2Oct 17, 2011 8:44 pm Normally it has to be a habitable dwelling. Ie bathroom, kitchen, living, bedroom. Don't forget that some lenders will reduce the max borrowing amount should the property be classified as rural / income producing ie farm, livestock or crops etc Some things are worth waiting for. Re: Home Loan - define home - looking to buy rough shack 3Oct 17, 2011 9:09 pm Thanks for the advice. Here is a good example of what I mean: http://www.domain.com.au/Property/For-S ... 2008722187 Basically a shed/house. Do you think something like that would qualify? Re: Home Loan - define home - looking to buy rough shack 4Oct 18, 2011 7:05 am Hi Many possible problems here if your looking for normal home loan including: Location: If land is not located close to a major regional town it may be considered "remote" and as such lenders may not lend. Land: Must be fully serviced (or have ability to be) ie have direct access to public sealed road, water, sewerage, power Dwelling type: If not council approved and without normal occupancy permits lenders will not lend. Owner builder: Most lenders will not fund owner builder construction and the few that do will restrict lending ratios, typically maximum 80% of land value only. Those that do lend will want to see that you have the ability to complete and hold all necessary permits. Re: Home Loan - define home - looking to buy rough shack 5Oct 18, 2011 1:04 pm kyton Normally it has to be a habitable dwelling. Ie bathroom, kitchen, living, bedroom. Don't forget that some lenders will reduce the max borrowing amount should the property be classified as rural / income producing ie farm, livestock or crops etc Spot on! Darren the link you sent - http://www.domain.com.au/Property/For-S ... 2008722187 This property wont be easy to finance. 1. Loan amount is low @ 70% LVR = ~60k ( property price is only 85k)- 2. It's classified as vacant land - even though there is a "shed" there- 3. Bank will want to know your purpose and if it's owners build then your going to find the max LVR is 80% but due to the location i would say its more 65%. 4. Location- 5. Valuation- There has been literally less then 10 past sales for this area in the last 12 month....so your going to have a issue where the bank don't know what it's worth and they will only accept the"purchase price" without valuation if you keep it at a low LVR...+ not all banks have a "no valuation policy" So in summary; keep the LVR at 65% and you will be ok. The question of "is this a home" should really be is this a acceptable security to the bank. Regards Michael Michael Chan | Australia wide Mortgage Broker Michael@ShapeHomeLoans.com.au | 1300 74 5626 | Fax: 02 8212 8909 http://www.ShapeHomeLoans.com.au 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 19097 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 35326 How much are you ahead in payments compared to where the build is at? Have you fully drawn down the loan? 5 11916 |