Browse Forums Home Finance 1 Sep 08, 2015 12:54 pm Hi, My land will soon register, and soon after we will start construction. Is there any disadvantage to having the finance for land and construction as individual loans with separate banks? The reason I ask is because I can get the loan for the land no problems, but for the construction, I may need a guarantor (if equity in land isn't an option. I have heard there can be complications with that). The fact that I need a guarantor might restrict which banks I can borrow form, which may lead to paying a higher interest rate. If I am forced to go with a big bank with slightly higher interest rates, I'd at least rather pay the higher rate on only the construction, rather than both the land and construction loans. I will of course be seeking finance for land soon, and I want to know if I should be thinking ahead of what banks might lend me if I need guarantor for construction, or whether I just find the best deal possible for land, then separately see what I can do regarding construction loan if I need guarantor. Hope that makes sense. Thanks. Re: Land and construction loan with same bank. Benefits? 2Sep 08, 2015 1:36 pm You can't separate the lenders, the lender wants security over your property and there's only the one security. Talk to a broker who can choose the right lender for both, considering the guarantee, and can probably get you a better rate. Rebecca Jarrett-Dalton Property crazy expert mortgage broker, love building new homes! Two Red Shoes mortgage broker http://www.tworedshoes.com.au/building 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 18894 How much are you ahead in payments compared to where the build is at? Have you fully drawn down the loan? 5 11842 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 35188 |