Granny flat finance

[mwac]

Hi,

I own a 2 bedroom house on a 650m2 block of land. I currently live with my grandmother and wish to build a granny flat for her to live in so she has more space/privacy.

We have agreed that she will pay for the granny flat. Because I don't have the money to pay for it, what finance options are there for my grandmother to fund it? Looking at $85K.

I don't have the money/equity to fund it through my home loan

 

[thatbum]

Umm, does your grandmother have the cash to pay for it?

 

[mwac]

No. Has half

 

[Rolf Latham]

most, not all lenders will do a build loan

if you "own" the property, suggests no debt, so a simple single draw down loan should also work

ta

rolf

 

[Mick C]

"I don't have the money/equity to fund it through my home loan" - suggests he/she have a max loan against the property already

If you want finance, you will need to obtain an FULL building contract with insurance and 5 progress payment...lenders can than lend on that amount up to 80-90% ( under your name of course, since you own the house- you and your grandmother can work out the financial in the background)

However full contracts are rare for granny flats..and to be honest out of hundreds of granny flat contract i only dealt with a small handful that's acceptable for the bank to accept that meets all 3 requirements + the contract are normally 10% more expensive if it's a "full contract with insurance" ....that's the reasons why they are all funded via cash or equity -done via a "simple contract"

 

[S.T]

I just wanted to add that it's awesome to have a thread on granny flats that an actual granny will live in, that is all.

 

[Terry_w]

Get legal advice.

What happens when grandma dies? What happens if there is a dispute and she moves out and wants her money back?

Watch out for potential elder abuse allegations down the track