Transfering finance to blocks created after subdivision

[smallbuyer]

Hello,

I am doing a subdivision turning 1 big block into 10 small blocks. I have a residential land loan on the 1 big block. I would like to keep the loan and transfer the security to around 4-5 of the newly created blocks, keeping the lvr the same as when i took out the loan. Does anyone anticipate any problems with this?

Cheers

 

[Rolf Latham]

portability may be ok with ur lender

does depend on the facility though

ta
rolf

 

[smallbuyer]

Hello,

Loan is portable the concern is they may not like me subdividing the block or less land area than they had before. Also i would very much not like to be asked for new financials as the loan is a lodoc and these have tightned up a lot since i got this one.

 

[bcoombs]

I think you will find you have to get their permission first before subdividing. So they will know about it anyway. Usually they will be fine as the 10 blocks will be worth more than the one anyway. You could get all your council approvals in place and sell the blocks " subject to issue of titles" and then present this to the bank. I am assuming your needing extra money for titles, services and a road?

 

[smallbuyer]

Thankfully dont need to borrow funds to do the subdivision as i hear development finance is rather hard these days. Has anyone heard of any situation where the bank tries to stop you getting the titles issued or calls in the loan when you tell them you are subdividing the blocks?

 

[bcoombs]

I've done some refinancing where this has happened before yes. Bit this is very rare.

 

[Qlds007]

Not a matter of may more a matter of will require the lenders consent to lodge the plan of subdivision.

No reason why they wont approve it especially if their security position is being improved.