Browse Forums General Discussion 1 Aug 09, 2011 4:07 pm Hi All, We purchased a house and land package and we are about 6-8 weeks away from handover. Was interested in the final valuation which will be carried out by the lender. Is this done just to ensure the home has been completed as per contract? Or is it possible a final valuation can be given which is lower than the contract price, meaning it's possible we will have to fork out further funds? Cheers Re: Final Valuation 2Aug 09, 2011 4:42 pm I'm no expert on the subject but I think it would be all about 'security' for the loan. They wouldn't care if it was completed as per contract. They just want to make sure that you have enough assets that they can sell if there is a problem with you paying your loan, etc. I could be wrong.... but with banks it's all about 'security' of 'their' money they are giving you. They want to be sure they can get it all back (plus, plus, plus, plus fee, interest, etc.). Re: Final Valuation 3Aug 09, 2011 5:11 pm Yeah it is all about a loan security. They must have something to fall back if you can't able to pay somehow. Re: Final Valuation 4Aug 09, 2011 7:12 pm It depends on the bank. Some banks do the inspection to ensure items have been installed, but it's mainly only if turnkey items are included in the home (carpets, blinds etc) - this is where issues can sometimes arise if you have done a variation to remove those items after finance approval. In general it is just for loan security, to make sure that the home that was completed will cover the loan that was taken out. Yes, if the valuation comes out too much lower than anticipated, the bank may not cover your full final progress payment, and you will be made to find the additional funds yourself - this has been happening a bit in the building industry lately, where banks won't cover the full final amount and clients can't cover the cost themselves, so the home sits in limbo until the builder takes out legal action. Re: Final Valuation 5Aug 10, 2011 11:00 am CA3105 It depends on the bank. Some banks do the inspection to ensure items have been installed, but it's mainly only if turnkey items are included in the home (carpets, blinds etc) - this is where issues can sometimes arise if you have done a variation to remove those items after finance approval. In general it is just for loan security, to make sure that the home that was completed will cover the loan that was taken out. Yes, if the valuation comes out too much lower than anticipated, the bank may not cover your full final progress payment, and you will be made to find the additional funds yourself - this has been happening a bit in the building industry lately, where banks won't cover the full final amount and clients can't cover the cost themselves, so the home sits in limbo until the builder takes out legal action. To expand on this: When you signed the contracts on your loan, you agreed to endure that your home would have a value of "X" (X = the figure in your loan contract). If the completed home is valued by the banks specified valuer at equal to or above X then you don't need to worry about anything. If the valuer comes in with a figure below X then you can arrange from your own valuer but you may still not get a value above X. If you cannot get the property valued at or above your mortgage amount then you will either have to pay the short fall yourself or find something that you 100% own to use as security (cars aren't any good because the only lose value) This situation is more common when you have not paid a deposit or have a low deposit of say 5%. if you have paid 10 or 20% then you will not likely have a shortfall. i would suggest nothing is unreasonable for PCI. we did all sorts, including checking the hot water, checking all the GPO's had power, testing that the showers were… 9 98679 Hi, I am approaching end of the build. My final invoice will be given to me soon to pay. Some context before I ask my question. 1. My builder wont do the landscaping or… 0 3865 regardless, your contract stipulates a payments schedule and SOPA doesn't give provision to that scenario. Your contractual terms appear to stand. Hence get a lawyer, it… 4 11869 |