Mortgage brokers get involved in a lot of interesting work, including helping ordinary homeowners to finance the subdivision of their family property. Homeowners with an older house on a quarter acre section can be in a happy situation we are selling off the back section and subdividing it can be a very lucrative business. The options for the homeowner are to let a developer come in and do the work, in which case the homeowner will only get the net value of the section less the cost of the subdivision, to organise a subdivision themselves in which case they get everything going but must be able to pay for the subdivision work.
The advantage of the situation if the homeowner is able to raise the finance is that they can subdivide the whole property in the most optimal way that generates the maximum return for them. This can be truly lucrative if the homeowner is able to create two new sections and a 1 to 3 subdivision, as this is generally legally possible what’s a quarter acre section. The problem for most homeowners is that the existing house as sited in the wrong location on the section, but the cost of moving the house forward on the property will almost always be a lot less in the prophets that come available from having a third section.
Mortgage brokers in Canterbury in these situations will be confronted with a homeowner that most probably has excellent equity in their property but is not cash much and so needs to borrow almost all the funding necessary for the subdivision. Banks are generally not happy at all about lending on sections alone, but fortunately for the homeowner and a mortgage broker there are a lot of non Bank lenders who are happy to lend into this market but at a much higher interest rate.
The job of the mortgage broker in this case is to find the best non Bank lender and the best interest rate, and then work with the homeowner to make sure that the plans for the subdivision are the best possible or that sufficient work is done up front buy the survey and planner to confirm that the one into three subdivision is completely viable. The mortgage brokers Christchurch may need to find initial finance just to make sure that the planner/surveyor can confirm the viability of the project, but after the viability has been confirmed then the broker will need to organise finance to fund all the subdivision planning work and all the consenting work it is necessary with the local City Council.
Monster part of the process is complete then the mortgage broker will need to find funding for the actual physical work necessary to properly subdivide the section, and this may cost as much as $100,000 per section. The sum will be even larger if the homeowner needs to move their house forward on the section, as this work is quite expensive and requires that they hire a specialist house moving company that can relocate the house onto new foundations and can install new water, sewerage and cabling.