Browse Forums Home Finance 1 Aug 04, 2008 10:33 am Hi,
We currently have a mortgage on our home of 60k. We are looking at buying a block and building. The block will be around 195k including stamp duty and the house we are looking at to build is 170k. We would like to sell our house so it settles approximately a week or 2 after handover to the new house. We expect to get a minimum of 320k for our house. What would be the best loan to do this. Ie Construction Loan, Line of Equity, etc? Specifically in repayments and no fees. Is there other alternatives? Would like to hear from people who have been in similar situation. Thanks in advance. Re: What Loan? Advice please. 2Aug 05, 2008 8:31 pm Cannot believe that we are in such a similar situation, even the current and future loan size... OMG
I go with the current bank is just because we are already with them (the current loan), and my friend is the loan manager... So really, i have not looked around and compare any deal at all.. Not sure if i can put the bank name here, so if you do need it, i can PM to you [/quote] Blog - http://clageonewhouse.blogspot.com/ Building Thread - viewtopic.php?f=31&t=10886&hilit=milan I am in, with my husband and my beautiful bunny Re: What Loan? Advice please. 3Aug 05, 2008 10:42 pm Thanks for the reply. I have sent you a PM.
Cheers. Anyone else who can provide advice? Re: What Loan? Advice please. 5Aug 06, 2008 9:23 pm Hi,
I'm Dave, Hubby from post above, There is, as you can imagine many options here, but the best one (in my opinion and experience) depends mostly on your financial situation (income, expenses etc). If you were to call a bank, they would most likely suggest a Bridging Loan. These are like pulling teeth at the best of times, but may be a possibility as you have heaps of equity in your current home. Some banks check your serviceability based only on your ability to service the 'end debt'. That is, what will be your debt once your current home has settled. For them to be comfortable with it they will also need your total combined LVR to be below 80% (generally). Most banks (and this is where the pulling teeth comes in) need to check that you service the total debt. This is strange because if you could service the whole debt (both keep the current $60K and simply lend the rest as well), why would you bother with a Bridging Loan. When I mentioned previously that the best loan (leaves you with the best rate and flexibility) is dependant on your financial situation, I was suggesting that if you can, as previously mentioned, service both debts you can keep the securities separate (I can explain the benifits of this further in a PM). If you were for example to draw some equity from your current property to cover enough of a deposit for the land and construction (20% being around $75K) plus a small buffer of a few months of repayments (if you believe it will be difficult to service the whole debt), you can keep the properties separate which will normally make your selling process easier. I hope that wasn't too much gibberish and I know that this isn't a full response, but I could end up confusing you with options that don't suit your circumstances. I am more than happy to have you pick my brain and I will now send a PM if you would like to discuss further. Dave. 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 19075 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 35305 How much are you ahead in payments compared to where the build is at? Have you fully drawn down the loan? 5 11893 |