Can you finance construction of a granny flat?
One of the ways in which you can be able to finance the construction of a granny flat is by taking a loan. However, there is a process you need to follow for you to be able to qualify for a loan. Also, in some cases, you may need to wait for a period of time of time before you can be approved for a loan.
So how can you be able to qualify for a granny flat loan?
On the brighter side, it may be easy for you to be able to get a loan and construct your granny flat. The chances also get hire especially if you have enough equity in the property that you already own. Also, it is going to be easy for you if you have the right amount of income that is going to support your loan with no problems easily. However, when it comes to getting a loan, there are some limitations that you may face which you should always be aware of.
The amount of the loan
If you are asking for an amount that is less than $50,000, then you are going to be asked by the banks to declare the purpose in which you are asking for the loan. However, you may not have or rather need to show the evidence to proof of what you stated as the purpose is true.
On the other hand, if you are asking for more than $50,000, then many lenders will end up asking you to provide evidence as to why you need to get the loan. This is also going to happen if you are a low doc borrower and your bank knows you to be.
The Loan to Value Ratio
If you are borrowing an amount that is lea than 80%, then you may find your lenders to be more flexible, and they may not ask to see some evidence. However, if you end up borrowing an amount that is more than 80% LVR, then your lender is going to be stricter and may ask you for some evidence before your loan can be approved. What this means is that the bank or rather your lender wants to know what you want the money for and it is also a way in which they can be able to control the finds.
Other requirements for you to be able to qualify
There are a number of other things that you may need to show for you to be able to be eligible for a granny flat loan. They include:
- You need to have a stable employment
- You need to have a solid credit history
- You need to have sufficient income
- You need to have a credit score that is above average
Also, you need to keep in mind that depending on the bank you are in, each of them has different criteria that are used when it comes to lending. Therefore, you need to know what it is that you are looking for before you start borrowing.
For more information call igrannyflats.com.au today.