The Vision is Clear

You've already visualised your dream home, perfectly situated on that ideal plot of land. The only obstacle? An outdated structure that needs to be demolished to make way for your modern sanctuary. But the question looms: can you afford it? And how do you secure the necessary financing for a knock-down rebuild? Let's break it down.

Laying the Financial Foundation

Before diving into the details of your dream home, it's crucial to understand your financial standing. This involves a comprehensive review of your income, expenses, assets, and credit history. For a knock-down rebuild, you'll also need to assess the equity in your existing property.

It's a common misconception that your property's value is solely based on comparable sales in the neighbourhood. However, the value of your land and existing structure will change once the latter is demolished. Therefore, it's essential to consult with financial experts who can provide a tailored equity assessment based on various factors, including your current mortgage and land size.

Choosing the Right Financial Partner

Once you've got a handle on your financial situation, the next step is to select a financial institution for your loan. If your current bank offers competitive rates and construction loans, sticking with them could be a viable option. Otherwise, you may need to switch to a lender that specialises in construction financing.

Preparing for the Build

Before discussing your vision with Appex Building, your trusted knock-down rebuild specialist, it's advisable to secure loan pre-approval. This not only gives you a budget framework but also streamlines the planning process.

To present a fixed-price contract to your lender, you'll need a preliminary assessment from Appex Building. This includes a site survey, detailed plans, DA approval, inclusions, and engineering certifications. Please note that while Appex Building can provide a fixed-price contract, architectural, structural, and services documentation are not included in the build and must be obtained separately.

Understanding the Loan Structure

Your lender will conduct a Tentative on Completion (TOC) valuation to ensure your project aligns with their lending criteria. This is also an excellent opportunity to ensure you're not over-capitalising on your investment. Unlike real estate estimates, a lender's valuation focuses on square meterage, the value of inclusions, and the projected worth of the completed home.

Once approved, your loan will be structured to include staged payments, allowing you to make repayments at different construction milestones. During the build, your repayments will be interest-only, minimising your financial burden. Upon completion, your new mortgage will be the sum of your existing mortgage and the build cost, minus any deposit you've made.