land/construction

[bel_aiden]

:wave: just a few questions for you!

just sold up on the sunny coast and back in victoria and looking at purchasing land and building as an owner builder (contracting out not doing much ourselves)

we are starting a business also so this will make finace a little hardr to get without all our figures...

now we have a sum of money in the bank, but would still need to borrow another 120k.

il pm u the amounts.

would it be best if we
a. buy land with our cash and use equity of land for loan to finance extra money required

b. have the money in bank account earning 6.5pa and use the intrest to pay loan for land so we have cash to build and when it comes time to build if we need more money add onto the loan we have (will be easier as business will be trading for while then)

any other advice would be great:thumbsup:

[andie_pandie]

Hi Bel_aiden

There are a few things to consider with this one, first of all there are only a handful of banks that do Owner Builder and you will have to check the requirements in your state as to the Owner Builder Regulations.

If you are owner builder most banks will only lend up to a certain amount against the land value only, this could be between 50-80%.

Another issue is as you stated starting a business, there are no doc and low doc loans out there where you have to have a certain amount of equity and also self state your expected income.

I will pm you to ask a few more questions.

Regards Andrea