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:

1. 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)