Hi Guys,
I've got a house worth about $560K owing about $440K.
I have a Planning Permit to put a unit in the back yard, and subdivide into 2 blocks once building is completed - I estimate it is going to cost approx $300K to build the unit in the back yard.
I'm looking to borrow approx $260K for the construction (as i will put in $40K), plus I already owe $440K on existing - so all up debt will be around $700K.
Once finished and subdivided, the front will be worth say $480K and the back worth say $520K so total end valuation will be around the $1M.
I've been told that because the subdivision doesn't happen until after the build is finished that the valuation will be valued as 2 on one block and that the valuation will be discounted by about 20% - this would put the valuation back to around $800K and mean I need to pay LMI (as loan would be approx $700K).
Is there a way around paying LMI or using end valuation? (other than subdividing before the build, or borrowing 80% of discounted valuation)
Many thanks
I've got a house worth about $560K owing about $440K.
I have a Planning Permit to put a unit in the back yard, and subdivide into 2 blocks once building is completed - I estimate it is going to cost approx $300K to build the unit in the back yard.
I'm looking to borrow approx $260K for the construction (as i will put in $40K), plus I already owe $440K on existing - so all up debt will be around $700K.
Once finished and subdivided, the front will be worth say $480K and the back worth say $520K so total end valuation will be around the $1M.
I've been told that because the subdivision doesn't happen until after the build is finished that the valuation will be valued as 2 on one block and that the valuation will be discounted by about 20% - this would put the valuation back to around $800K and mean I need to pay LMI (as loan would be approx $700K).
Is there a way around paying LMI or using end valuation? (other than subdividing before the build, or borrowing 80% of discounted valuation)
Many thanks