4 months ago we purchased an existing home, which we want to do some work to. When is the earliest we can request a refinance with our Bank?
Most Lenders offer a Top Up loan which is simply increasing your current loan providing it is not a Fixed loan. In that case you may need to request a separate loan for the renos.
Two main factors to consider -
- do you have enough equity to borrow more ( this will depend on a new valuation)?
- will your income support the increased debt?
I hope this helps
Happy to chat anytime
You raise an interesting and common question as a lot of home buyers are pretty keen to get some work done around their new home.
My advice would be to contact your existing lender first and open the discussion with what you would like to do with the property. If you have borrowed 80% or less than you may have some options in being able to increase the loan amount depending on the nature of the work and the cost involved
If there is a lot of work you would like to do then you have the option of speaking to a licenced builder and getting some plans in place.
By speaking to your existing lender you could ask them if they would be prepared to value the property based on the council approved plans and the estimated market value at the time of completion of the work. You might find, if the lender is ok with this process, you might be able to borrow the funds you require.
Obviously any increase in the loan amount would need to be approved by the lender in terms of your income and ability to service the loan.
See how you go with your existing lender first and then perhaps speak to a couple of finance brokers for other options – if you have fixed any part of your existing loan you need to check on the penalty and exit fees should you look at another lender.
Hope this helps
It depends on the type of work you are taking about. If it is structural you will need to supply building plans & quotes & this can be done as soon as you own the property.
If you are talking about more cosmetics work then you will need to wait for the Propety value to increase. Why not ask your broker or bank for a free Propety report to check your current property value.
I hope this helps
There is no minimum time, what you want to know is when does it make sense to increase your loan to pay for the renovations. Answer if you started with plenty of equity then your just re-bowering back some of deposit money. If you started with minimum equity or you borrowed 90% then ask yourself this question, will the renovations increase the value by enough to maintain 90% debt to value? If no, then it's not the right time.
anytime as long as you have built some equity
if you borrowed with LMI you will most likely have to pay the premium again .
might be better advised to raise a secondary loan
Your broker should have sort this goal in their initial fact find .....
love to know more about your loan structure
Nathan there should not be any problem refinancing anytime however you will need a broker to determine if there is any value in refinancing given some exit fees you may have to pay.
But quite a few lenders are offering cash back offers of $1500 for refinancing. Keep in mind other lenders want your business so most of the time they can give you a better deal and as a broker we can further negotiate on your behalf!
Hope that helps.