Help to find 95% construction loan for investment property

Thanks for your quick replies - we could pay LMI upfront so it would be 95% excluding LMI. The property is in dubbo so regional

Thanks
 
95% inclusive of LMI is possible absolutely, do you have any other properties at all? Generally the lenders are requiring 10% equity shown in another property to allow 95% though.
 
For an investment property the LVR would generally be capped at 95% including LMI. I'm sure your broker can find a lender who will accommodate what you need.
 
We have two other properties - both in NZ (with finance from NZ banks) - have held these for around 10 years so these are probably LVRs of 50% and positively geared for rents. The broker said the banks would not worry about these properties as they are overseas - but at least they are not highly leveraged.

The broker seems to think the issue is the fact its construction and the fact its an investment property. Perhaps they get worried that the valuation of the completed property won't stack up?

The land is a separate contract to the construction contract but we would want LVR of 95% on both the land and the construction.

Do you have any suggestions on finance companies who would be comfortable with this situation?

Thanks
 
Will you be buying land first and then sourcing a builder to build house on? Or buying as a house and land package?

I think bankwest and home side accomodate a 95% lvr construction loan. Would be 95% of land value plus fixed price contract.

Cheers
 
We are buying the land from the same group (it may well be a different company within their structure I'm not sure yet) as those doing the building but they are structured under two different contracts. The land contract is signed first.

Thanks for those suggestions - I'll check those out now. Any others suggestions for finance companies other people can think of would be much appreciated!

Thanks! :)
 
most lenders can do 95% for investment. few restrict their LVR for construction. the broker might be gun shy on the bank valuation.

I strongly suggest doing the house and land at the same time.
 
most lenders can do 95% for investment. few restrict their LVR for construction. the broker might be gun shy on the bank valuation.

I strongly suggest doing the house and land at the same time.

Thanks for your suggestion - when you saying "doing" at the same time - do you mean arranging the loans or signing one contract instead of two (my understanding was that it was structuring in this way so that stamp duty is paid on the land value but not on the construction part of the package but I may be wrong)?
 
Thanks for your suggestion - when you saying "doing" at the same time - do you mean arranging the loans or signing one contract instead of two (my understanding was that it was structuring in this way so that stamp duty is paid on the land value but not on the construction part of the package but I may be wrong)?

He means apply for the loan with the building + land contract together and financed together - rather than settling land first, then going for construction loan afterwards (due to valuation concerns).
 
Ah I see - sorry I may have been sloppy with my wording but I had assumed that the loan would be applied for at the same time (even though there are two contracts relating to the house and land package) so I think I'm planning on doing what you are suggesting but I will definitely clarify this with the broker - thanks for your suggestions.
 
95% inclusive of LVR for IP for land and home package ( construction), is available with - Bankwest, Homeside ( rate loading applies), ING, Gateway credit union


However, if your going to pay for LMI out of your pocket anyway- i would suggest you do a 90% + LMI loan instead ( End LVR is around 92-95% depending on the total cost)

Why?
- Save on LMI cost ( save a few thousand)
- Higher approval chance
- larger choice of lenders
- Better loan structure for an investment property ( ie you can do I/O)
- Better interest rate

Cheers
 
Thanks Michael - yes very valid point - its easy to only think in terms of 90% vs 95% forgetting there is middle ground so will definitely consider your suggestion when we lock in final numbers! :D
 
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