Can you get a home loan for a granny flat?
Yes, you can get financing for a granny flat in several ways. Here are the main options:
Construction Loan Options:
Add to existing mortgage through refinancing
Construction loan specifically for granny flat
Home equity loan
Line of credit
2. Common Lending Requirements:
20% deposit typically needed
Property valuation
Council approval/plans
Builder's license and insurance
Construction contract
Cost estimates
3. Factors Banks Consider:
Your current income
Existing mortgage payments
Potential rental income
Property value
Credit history
Construction costs
4. Loan Features to Look For:
Progress payments for construction
Interest-only options during building
Competitive interest rates
Flexible repayment terms
5. Documentation Needed:
DA or CDC approval
Building plans
Fixed-price building contract
Builder's insurance
Cost breakdown
Income proof
Tips:
Shop around different lenders
Consider mortgage broker expertise
Get pre-approval before starting
Factor in additional costs (fees, insurance)