Securing owner builder finance can be a challenging affair. Owner builder loans are generally not embraced by the finance industry. The majority of mortgage brokers and bank employees don’t understand owner builder finance at all. There are a limited number of lenders offering owner builder loans. Because there are stringent policy guidelines involved, knock-backs are common. We believe in addressing potential obstacles upfront, to save time and disappointment in the long run.
How can we help?
- Finding expert help: Finance experts who specialise in owner builder lending are in short supply. Our qualified and experienced owner builder finance specialists have an intricate understanding of the construction process ensuring that your application has the best possible chance of success.
- Restrictive Loan to Value Ratios (LVR): LVR policies vary from lender to lender and, as a result there are significant differences in borrowing power between the owner builder lenders. We’ll ensure you maximize your borrowing power and help you secure the highest LVR loan appropriate to your needs.
- Small range of lenders: Owner builder loans are perceived to be high-risk and are not available through a majority of lenders. We have access to the highest LVR owner builder lenders in the country.
- Strict lending guidelines: As an owner builder you are subject to more stringent credit assessments and lending guidelines than you would be for a standard loan.
- Selecting the right lender: Comparing owner builder lenders and their policies can be an overwhelming and time-consuming task. We’ve done all the research and we know which lenders will be most receptive to your project. At My Property and Finance we will help you maximize your funding potential and secure the most flexible, highest LVR loan appropriate to your needs.
- Establishing your budget and project feasibility: You cannot get your design underway until you know what construction funds you are likely to have available. In one quick phone call we can help determine whether you can qualify for owner builder finance, what funds you can potentially borrow and whether or not your project is financially feasible with regards to lender policy.
- Low valuations: Valuers generally take a conservative approach to owner builder valuations which can have a negative impact the overall funding capabilities of the project. Valuers usually take into account your land value plus your constructions costs, which is not necessarily the true end value. By offering additional supporting documents to the valuer, including comparable sales, we increase the likelihood that your valuation will reflect the true end value of your property upon completion.
- Under construction: Most lenders will not approve a loan if construction has already started. We communicate this to all our clients so that they are aware of this from the beginning so construction work does not commence until finance is secured.
- Limited funds: If a customer has insufficient funds to obtain an owner builder loan, we can present alternative funding options by way of a fixed-price construction loan. The right fixed-price building contract may still enable your new owner built home to become a reality.
How much can I borrow?
The next part of the puzzle we’ll help solve is your potential Loan to Value Ratio (LVR) and your buffer requirement. These policies vary from lender to lender so there can be significant differences in borrowing power between each lender.
- Land: Loan to Value Ratios range from 50-80% of land the value*
- Construction: Loan to Value Ratios range from 50–80% of construction valuation, not construction costs*
- Buffer/Contingency: Additional cash required ranges from 10-40% of construction costs*
*Disclaimer – Your full financial situation would need to be reviewed prior to acceptance of any product or offer.
We’re continually monitoring the owner builder finance landscape to ensure our advice is current. My Property & Finance pride ourselves in being at the forefront of owner builder finance and securing the best finance solutions available.