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Christine R.
Christine R.
Norlane, VIC
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Im doing some research for my parents. They own their home outright and they want to knock down that home and build another one in that place. Now do they need to re finance that home or what other options do they have to get funds for the build?

7 years ago

Responses

Hi Christine,
They would apply for finance to demolish and build based on the expected valuation of the new property and their ability to service the end debt. For example an average 4 bedroom single level home would cost around $350,000 plus demolition and site costs of $30,000. So if they can service an end debt of say $400,000 and afford to live elsewhere for 12 months they should be ok.
They should get some advice as to the value of their house as it stands now and the equivalent costs of buying a new home elsewhere. For example if they could get $450,000 for their current home, they are effectively paying $850,000 for their new house?
I would be happy to sit with the three of you to discuss the borrowing side but you should all discuss the longer term impact on their overall situation.
Best of luck
Scott

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