Mortgage broker Fremantle

Heritage, non-standard construction and the valuation

Much of Fremantle's older housing is limestone or timber framed with weatherboard, often on stumps, often altered several times. Lenders class anything outside double brick or brick veneer as non-standard construction, and each one has its own view on it.

The second complication is comparables. Fremantle cottages are genuinely individual, so a valuer has fewer directly similar sales to work from than in a suburb of consistent stock.

The result is a wider range of possible outcomes on the same house. We have seen valuations on Fremantle properties come back with conditions attached to the report that a branch lender would simply have refused.

• Non-standard construction, including limestone, weatherboard and stump foundations
• Heritage listing or a heritage area, which restricts alteration and demolition
• Valuer comments on structural movement, timber pest activity or restumping
• Fewer directly comparable sales, which widens the valuation range
• Insurance, which some lenders check more closely on a listed property

Renovating and restoring, and how it gets funded

Restoration work in Fremantle is rarely a straight build. Heritage requirements push you towards specialist trades, salvaged materials and methods that a volume builder does not quote on.

That collides with how construction lending works. A construction loan generally wants a fixed-price contract with a registered builder and a clear schedule of progress payments, and heritage work resists both.

There are usually two ways through. Either the work is packaged into a contract a lender will accept, or you release equity as a straight loan increase and pay the trades yourself.

Which of those fits depends on how much equity you hold, how defined the scope is, and lender approval. It is worth mapping out before the first trade is booked.

Shops, warehouses and living above the street

Fremantle has an unusual amount of mixed-use property, and the port and light industrial areas add warehouses and small commercial premises. Plenty of local business owners want to buy the premises they are already renting.

A property with a shop downstairs and a residence upstairs is not a home loan. Lenders classify it as commercial or specialised residential, which usually means a different loan term, a lower borrowing ratio and a different valuation approach.

• Commercial loans for owner-occupied premises in and around the port
• Mixed-use finance where the property has a shop and a residence
• Investment lending on tenanted commercial property, assessed on the lease
• Development finance for small residential and mixed-use projects
• Standard home loans and refinancing on the residential streets

Short-stay letting is worth a mention because Fremantle attracts it. Most lenders will not count short-stay income the way they count a residential lease, so build your numbers on the conservative assumption.

Who is buying in Fremantle

The buyer mix here is broader than most Perth suburbs. Owner-occupiers who want the lifestyle and will accept an old house, investors after character stock, and business owners buying commercial premises.

There is also a steady flow of people refinancing away from a lender who valued their cottage poorly. That is a fixable problem and it is one of the more satisfying files to run.

Refinancing could save you money, but only if the numbers actually work once the costs are counted. If they do not, we will tell you so rather than write the loan.