Jul 07, 2020 12:45 pm
We gonna start the knock down and rebuild construction period soon. The current old property we are going to demolish and rebuild still have home loan with bank. But the construction cost we will be totally paid by cash in hand.
My question is, theoretically bank partly own current(old) building, do we need to let the bank know we are going to rebuild it? even we are not involve bank to mortgage any rebuilding costs.
Re: Does our current mortgage bank need know knockdown rebui3
Jul 08, 2020 3:29 pm
Yes, you do need to get the banks consent. As they hold a mortgage over it they need to be informed of major changes, of which a knockdown and rebuild is.
It shouldn't be too much of a hassle, as you are paying cash and the bank will have a property that will assumingly be worth more than it currently is.
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Re: Does our current mortgage bank need know knockdown rebui6
Jul 08, 2020 5:23 pm
Sorry but what is a CDC?
plc Complying development certificate - NSW speak for fast track approval.
hxyconan you should still notify the bank as their security has changed - the worst that can occur is you might come unstuck part way through the build and they are left wth an unfinished build as their security, hence their risk is increased while you're in the construction stage. It's not to do with the approvals, it's to do with risk.
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Re: Does our current mortgage bank need know knockdown rebui7
Jul 08, 2020 5:41 pm
We have been in a similar but slightly different situation twice.
We've had loans on vacant blocks twice and have then built on the land using cash.
Technically we should have informed the bank that we were developing the land but didn't bother until the build was finished (infact may not have ever told the bank, can't remember).
It would be a different matter if your loan included the house as knocking down may reduce the LVR.
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