Half of Lilyfield’s homes are separate houses, many of them former workers’ cottages, and a third carry a mortgage.
In stages. The purchase is valued as the cottage stands today, so the deposit is based on that. Lenders want the costings before they lend against the improvement.
Cosmetic work can come from savings or a redraw; structural work usually needs plans, quotes and either a loan top-up valued on the finished home or a construction loan.
Terraces and semis are a familiar sight in Lilyfield, at 22.8% of the housing. Heritage controls on some streets limit what can be changed, which matters if the plan is to renovate with the loan.
Separate housesTownhouses and semisApartments
apartments NSW 21.7%
separate houses NSW 65.6%
terraces and semis NSW 11.7%
rented NSW 32.6%
with a mortgage NSW 32.5%
private dwellings
Source: ABS Census 2021, Suburbs and Localities (SAL12334).
Home equity calculator
For upgraders and investors, how much of your home could work as a deposit.
That usable equity could work as a deposit on an investment property or renovation, structured so your properties aren’t tied together unnecessarily.
Usable equity assumes lending to 80% of your home’s value against your current loan. Lender policy and serviceability decide the real figure.
Confirm your numbers.
Charles and the team at links property finance recently assisted me with my purchase of my first property in Burwood. As a first home buyer, Charles made the process simple and easy. I would recommend Charles to all first home buyers
Paperwork and finances were never my strong suit. He has made this process as simple and dummy proof for me as humanly possible. This is not the first time I use a mortgage broker, however it was the easiest and most pleasant.
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When you buy a property that needs work, the lender values it as it stands today, not as it could be.
Visible problems, such as a failing roof, damp or structural movement, can lower the valuation and occasionally make a lender cautious about the property as security. A building report before you commit tells you what you are taking on.
Funding the renovation is a second question. Smaller jobs can be paid from savings, an offset account or a later top-up.
Larger work usually needs a construction loan, which relies on approved plans and a fixed-price contract and releases money in stages as the work is done. Renovation lending in detail
Charles Touma, Mortgage Broker.
Lilyfield lies about six kilometres west of the city in Inner West Council, with Iron Cove to the west and Annandale, Rozelle and Leichhardt around it. Leichhardt Park, with its aquatic centre, sits on the Iron Cove foreshore.
The Lilyfield light rail stop on Catherine Street opened in 2000 on a former goods line, and was the end of the line until the extension to Dulwich Hill in 2014.
For modest work with a clear price, drawing on savings, an offset balance or redraw is the simplest route. A top-up, which increases your loan against the current value of the home, suits jobs that fit within your existing equity.
For a larger renovation, a construction loan is designed for the job: funds are released in stages against the builder’s invoices, and the loan can be based on the home’s value once the work is finished. It needs more paperwork, including approved plans and a fixed-price contract. Construction loan documents.
A building and pest report shows the condition of the structure, roof, plumbing and any termite activity. On an older cottage it often finds work you had not budgeted for, and occasionally something serious enough to change the price or your decision.
Getting the report before you commit gives you a negotiating position, and a realistic renovation budget from the start. Questions to ask before you offer.
Many lenders prefer a licensed builder on a fixed-price contract for construction lending. Owner-builder projects, where you manage the work yourself, are assessed more cautiously, and fewer lenders fund them.
If you plan to do some work yourself, it may be simpler to fund that part from savings and use a builder for the structural work the lender will fund. A renovation with a buffer.
Stage one. The property and the plan. What you want to buy, the work it needs and your budget for both. No documents are needed for this part.
Three scales of Lilyfield renovation, and what each means for the loan.
The groundwork for buying the property and funding the work.
Usually, if the property is sound enough to be acceptable security. The loan is based on its value in its current condition, and serious structural problems can lower the valuation or make some lenders cautious. A building report before you commit tells you where you stand.
Not usually at the start, because the purchase is valued as it stands. Smaller work can be funded later with a top-up once you own the home. Larger work is typically funded with a construction loan once you have approved plans and a fixed-price contract.
A top-up increases your loan against the home’s current value and releases the money in one amount. A construction loan releases funds in stages as work is completed, and can be based on the value once the renovation is finished, which suits larger projects.
For structural work, yes, lenders generally want the required approvals in place. Cosmetic work usually does not need approval. Heritage controls can affect what is allowed and how long approvals take.
You can, but lenders are more cautious about owner-builder work and fewer will fund it. A common approach is to pay for the work you do yourself from savings and use a licensed builder for the structural work the lender funds.
It can, but not always by as much as it costs. Once the work is finished, a revaluation shows the new value, and any increase can be used for other purposes if you choose. Planning the work with resale value in mind helps.
One free call covers what you could borrow in Lilyfield, the lenders that suit the property you want and the order to do things in.
Prefer a callback?Charles calls back within one business day. No documents needed yet.
General information only, not credit or financial advice. Lender policies and government scheme criteria differ and change over time. All lending is subject to individual assessment and approval.
