The bank

Well - see if you can figure this logic out (the bank's logic).

You can borrow 85% of value on vacant land
You can borrow 95% of residential property
You can borrow 65% of rural property

Our land is residential once we start building - but at the moment it's vacant land. They won't take into account the value of the barn being built because it's residential ultimately. We have borrowed money to buy the land and build the barn, based on the fact we own a rental property and our current house. When we settle on our current house we will repay the bridging finance for the land and repay alot of the mortgage from our current house.

George owns a hangar which he built - we got some added on to our mortgage rather than a seperate loan. So - the bank has security over our two houses and our land but not the hangar. Once we settle - we will own some vacant land, a barn, and a hangar and a rental property. We will have a small mortgage in comparison to what we have today - yet the bank seems to think we will be in a worse position for borrowing another $30K to cover the sewage system, the water tank and the excavation of the barn.

The bank manager spent about 20 minutes explaining it to me but I still don't really understand. Something to do with not being able to count the value of the barn, and only being able to borrow 85% due to it being vacant land. Even though for servicing the loan, we are in a much better position.

Apparently they don't have security over the hangar or the barn (about $250,000 worth of assets) which seems kinda crazy - why do they want to know what assets we have if they don't count them?

Anyone make sense of that?