Browse Forums Home Finance 1 Apr 24, 2013 1:26 pm Hello everyone, I have never owned a property before but I am looking at building within the next 2 years, depends on the outcome of a sale of an inheritance property (not in my name). However, it is quite possibly that the sale of the said property will cover the cost of a land and part fo the construction cost. I would like to borrow $150000 from the bank but I have a few questions that I am not sure of: 1. When taking out mortgage, is it done as land + construction? Even if I actually own the land? 2. When settle after construction, if the final drawn down amount is well within the money that I was going to borrow, say $20k out of the $150k is left after settlement, can I still take that money and put in my saving account to say... cover a car loan, other house stuff? Thank you! Re: Home Loan and draw down 2Apr 25, 2013 9:26 pm If you already own the land, then you'll only need to get a construction loan. Any excess money (if any) can be put straight into your account once everything has been paid. At least thats what we're doing. Hope this helps, Re: Home Loan and draw down 3Apr 26, 2013 11:17 am Hi K4neX, Just a quick tip. Make sure that you get your construction loan approved before you commence construction. We see a lot of people in your situation that wait until they are out of money before they seek a loan. The problem is that many lenders will not accept a partially completed house as security. Hope that helps, good luck with your new home! Re: Home Loan and draw down 4Apr 26, 2013 11:34 am Thank guys for the tips. jb_money, thank you for the reminder. I am going to get a pre-approval for the whole construction cost even though I may be able to cover part of that myself. I figured that since it's a draw down loan, it doesn't mean that i will have to take every single cent. 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 18897 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 35192 |