Loans for building and renovating
Building or renovating your home is an exciting journey to undertake. It can certainly be an intimidating task to begin, with many different paths to take.
You could be looking at a vacant block of land to build a home on, demolishing an existing home to build new, a house and land package, or renovating your property to give it a fresh new look. Each journey taken requires careful planning and resourcing, so having a Bernie Lewis Home Loans Mortgage Broker guiding you is an integral component toward an enjoyable building or renovating experience.
Speak to us about your build or renovation dream, and we’ll do our best to find a suitable finance solution for your requirements.
A land loan is a type of finance used to assist with the purchase of a vacant block of land, of which a home can be built on. A land loan can be a standalone product to a construction loan, should the build of a new home commence at a later date after the settlement of your land purchase.
A construction loan is typically quite different to your standard home loan product and is designed specifically to finance the build of a new home or to fund renovations of a structural nature on an existing home.
Construction loans are usually funded in multiple stages with ‘progress payments’ typically made to the builder according to the specifications of a building contract.
Typically, construction loans are interest only during the build (or for a set time), which means you will have reduced repayments whilst the home is being completed. When the construction work has been completed to a satisfactory standard, the loan would convert into principal & interest repayments for you to start paying down the debt.
A house and land package vs buying land & building separately
Buying land and building over buying an established property can be financially beneficial, with State Fees and Charges (in South Australia) only payable on the value of the land.
Making a choice on buying a house and land package versus buying land separate to a build contract has a number of considerations. Below are some benefits of each option to think about:
House and land package benefits
- Know what you are paying in total from the outset
- The floor plan is likely to be optimised for the site
- Land and build may have the ability commence simultaneously
- Concessions on land or build prices
Buying land and building separately benefits
- Could enable more time to save funds to assist with house construction, off contract items and establishing the site
- Greater ability to purchase land in a premium location, rather than developments or subdivided allotments
- A wider choice of builders to choose from
- Allows more control in the design of the house, or capacity for custom designs
Unlocking equity in your property to fund renovations
If you would like to renovate your existing home, one option you may have to finance the renovations is to utilise equity you may have available in your home.
Essentially equity is the asset value of your home you actually ‘own’, being the difference between home loan debt and the value of the property. For example, if you may currently have a home valued at $500,000 with an existing home loan of $200,000. In this scenario, a Bernie Lewis Home Loans Broker may assess if you are in a position to access additional borrowings to fund renovations. You could have the capacity to increase loan funds up to 80% loan to value ratio (or more if you are happy to pay Lenders Mortgage Insurance), which could result in having $200,000 available to assist with renovating your home.
Your first home loan is a journey. Wouldn't it be nice if you had an expert guide who would give you a hand in making the best decisions and avoiding the pitfalls?
Well that is exactly what Bernie Lewis Home Loans brokers do. In fact we have been doing this for decades. Best part – it doesn’t cost you anything extra. So what are you waiting for?
My partner and I were really out of our depth at the start of building a home. We visited a few banks who weren’t all that helpful, but we talked to our Mortgage Broker and she explained everything to us in a way that was easy to understand and made us feel really comfortable. She went out of her way to help make sure the process was as simple and smooth as possible. Every question I had no matter how odd was answered thoroughly. Definitely will recommend Bernie Lewis Home Loans. They actually made building a house a fun and relatively stress free experience.
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