Browse Forums Home Finance 1 Feb 22, 2015 4:18 pm Our dilemma is that we have put a contract on a block of land (not needing to get finance till end of April) and we plan on building a house on it to live in. I am unsure what to do. Dilemma is do we do we attempt to stay put and get a bridging loan while the house is being built (using equity in our current home for deposit) or do we sell and rent. The problem I have with the selling part is that our current mortgage repayment is around $260 per week whereas to rent in our area is going to cost us almost $400 a week in rent. But if we sell we will have $150000 to put towards the new house as deposit. Thoughts anyone? Building a Coolum 30 (hopefully) http://theryanshome.blogspot.com.au/ Our Build Thread https://forum.homeone.com.au/viewtopic.php?t=76814 Re: Better to sell first, rent while building a new house or 2Feb 22, 2015 4:25 pm Heres a question, do you need the money from the sale to contribute to the build? If you are bridging will you end up borrowing more than 80% of the combined value? That will add a significant cost in mortgage insurance. Do you have a friendly broker? It's a simple exercise to do the math if you know your numbers. Rebecca Jarrett-Dalton Property crazy expert mortgage broker, love building new homes! Two Red Shoes mortgage broker http://www.tworedshoes.com.au/building Re: Better to sell first, rent while building a new house or 3Feb 22, 2015 5:13 pm You need to work out the cost of doing both options and then decide. Staying put you will likely have to pay LMI as well as interest on two loans (not to mention having to service 2 loans at once), it will probably be more convenient for the family as you'll only need to move once. Something to consider is there is somewhat less certainty on what you can spend on the new place as you won't actually know what your current place will sell for. Selling first will hopefully negate the need for LMI but as you said, rent in your area is greater than your current mortage costs. You'll need to move twice and possibly put things in storage if they won't all fit in the rental. The upside is you'll know exactly what you have to spend on the new place but you may also be missing out on some capital gains if your area is growing strong. We went through the same process 18mths ago and ended up selling 1st and moving in with family for a whole number of reasons. Re: Better to sell first, rent while building a new house or 4Feb 23, 2015 4:56 pm As others have said, do the numbers and see where you're at. You may find that you have enough equity in your current place to allow bridging and avoid LMI, however be aware to use a lender that works on end debt and not peak debt. Cheers Tom Re: Better to sell first, rent while building a new house or 5Feb 24, 2015 9:27 am The most important thing is to speak to your bank. Some banks don't like lending for a build when they have no collateral (ie the land). You don't want to be buying the land only to discover you then cannot borrow to build the house. I've seen it happen. Hello everyone Please advice me how can I install mesh security window or we cab say mesh flyscreen inside while the pvc plantation shutters are already installed? Is… 0 11955 Use a product like Equisol's Vitalise to clean the deck then coat with a penetrating timber oil. It will look 10 years younger and add value to your home. Visit for… 1 16216 brokers will also be in a position to get you a better rate than the advertised rate most times. 6 7843 |