Residential or commercial loan?

Hi guys.

I am having some finance problems and hopefully someone has been through something similar before.

I have a contract on a piece of land in QLD. The previous owner has development approval going through council (not approved yet) to sub divide the lot into 20 blocks. The bank is refusing to value the land as residential and needs it to be commercial.

My plan is to develop the land in 3-5 years and not right away. I cannot afford a commercial loan at 70% and was looking to borrow 95% on a standard residential loan through CBA.

I believe I should be able to purchase the land now as a residential block and understand the loan would need to be changed to commercial before the land is developed which is OK. However I have tried explaining my 3-5 year plan to the bank and they are not happy with it.

Does anyone have any suggestions how to get this financed? Maybe removing the plans from council? I am not sure.

Thank you.
 
Speak to a broker about your options. The main issue will be - does the valuation stack up as a residential piece of land or will it only stack up as a commercial land valuation using the DA as a value-add?
 
Thanks Aaron.

Broker is not contactable at this point in time and there is no one I can turn to in the next week or so.

I was hoping there would be a broker or contact on here which could give me some advise.

I believe the valuation will stack up as residential yes.

Nathan
 
The way it reads Brady had a poor experience with Aaron_C, if that's not the case it could certainly do with some clarification.
 
To the posters original questions, I highly doubt you will be able to optain a 95% lend on that size vacant land. You may be able to get 80%.

As alluded to earlier though, having a residential loan is going to generate a residential valuation, that is, the valuation wont take into account the potential for subdivision. How much does farmland go for in the area?
 
To the posters original questions, I highly doubt you will be able to optain a 95% lend on that size vacant land. You may be able to get 80%.

As alluded to earlier though, having a residential loan is going to generate a residential valuation, that is, the valuation wont take into account the potential for subdivision. How much does farmland go for in the area?

Agree with Tobe. 80% is likely your best outcome if there is no current house on it.
 
Getting this on resi > 80% would be a tough ask as your entering the LMI territory and both QBE and genworth won't like the reason for buying this sort of land + the size of the land.


80% Resi- doable.
 
No quick answer

Thanks Nathan, there are several ways to skin a Cat, but not a Dog I'm told .. lol

I really do appreciate the brokers on here trying to help ..... no other profession puts itself out like brokers - they need to be applauded.

However, I see a need for you to have a chat with a Financial Strategist (Credit Advisor, Financial Adviser & Investment Coach) rather than a broker. I would pursue a long term discussion to better understand your goals and objectives in this strategy.

I meet several clients with plans like yours each month and we save them a lifetime of heartache. So don't hesitate, you can look me up..

All the very best...
 
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Investment Coach rather than a broker. I would pursue a long term discussion to better understand your goals and objectives in this strategy.

always good to look at the long term view and the resources to obtain same.

I know what a credit adviser does, I know what a financial adviser/planner generically does, whats an "investment coach" do ?

ta
rolf
 
However, I see a need for you to have a chat with a Financial Strategist (Credit Advisor, Financial Adviser & Investment Coach) rather than a broker. I would pursue a long term discussion to better understand your goals and objectives in this strategy.

In other words, a mortgage broker!
 
Thanks Nathan, there are several ways to skin a Cat, but not a Dog I'm told .. lol

I really do appreciate the brokers on here trying to help ..... no other profession puts itself out like brokers - they need to be applauded.

However, I see a need for you to have a chat with a Financial Strategist (Credit Advisor, Financial Adviser & Investment Coach) rather than a broker. I would pursue a long term discussion to better understand your goals and objectives in this strategy.

I meet several clients with plans like yours each month and we save them a lifetime of heartache. So don't hesitate, you can look me up..

All the very best...

Cool story bro.
 
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