Going To Knock Down Rebuild For Your Next Home? Discover Its Top 3 Financing Options
So you found the ideal property in your preferred location, and all you need is a brand-new house that will suit your and your family’s lifestyle? A knockdown rebuild in Sydney can be a great solution, but financing it might not be so simple.
To finance to knockdown and rebuild a home, you must necessarily be familiar with every aspect of this intricate process.
Top 3 Ways to Finance a Knock-Down Rebuild
- Construction Loans For Knock Down Rebuild
Getting a specialised building and construction loan is a popular method of financing a knockdown and rebuild.
These loans offer funding in stages, as per the milestones in your project. The initial payment may be made when the contract is executed. It will be followed by additional payments upon completion of the demolition, and so on. Construction loans normally have an initial 12-month interest-free period or until the entire loan has been borrowed, whichever comes first.
- Use Equity For Knock Down Rebuild
If you already possess a significant amount of equity in a property, you can borrow based on the equity. Simply put, if your present home is worth $700,000 and you owe $150,000, your equity is $550000. You can refinance your original home loan. Your lender may seek a buffer of 20% or more and lend the remaining. The benefit is that you can pay for the knockdown rebuild in instalments; however, the disadvantage is that as soon as you borrow, you are required to pay interest on the balance.
- Redraw On Your Ongoing Home Loan
Do you have access to a redraw facility on your current home loan ( one that enables you to make extra payments toward your mortgage and then draw on it as needed)? If the knock down rebuild price is too high, you can use the redraw option in your current loan to possibly finance it.
If you wish to finance the construction of an entirely new home, you will probably need to have paid off quite a bit of your current home loan. However, you may be able to combine this source of funding with another to help fund your knockdown rebuild.
Your knockdown rebuild is an exciting project that doesn’t need to be weighed down by heavy financing. Fortunately, there are many better financing options for your luxury knock down rebuild in Sydney. Additionally, when you choose to finance a knockdown rebuild you can also time your valuations to ensure that you get your hands on the best possible deal!
Going for expert home builders such as Kaplan Homes can make your dream home come true.
