Browse Forums Building A New House 1 Apr 28, 2009 10:36 am I have just gotten off the phone with our broker and I am in need of some advice. We are building with M and they require a 5% deposit at contract signing less $3k for drawings and $1k for our initial deposit. We have over $30,000 dedicated to a deposit on our loan and our broker want's us to maintain this and so do we. He has said to speak to M and say that as we are FOHG recievers, our funds are tied up in the $29k to be paid when the slab is poured and to instead offer $2k - $4k instead of the 5% with the rest to come from the grant. Has anyone experienced this? What was the result? Our broker seemed to think it was routine as most home builders dont have 5% ****** around the place. Building our FIRST HOME - M3tricon Santorini 29 on 2 acres just West of Warrnambool Re: First Home Builder - Trouble Paying the 5% at contract sign? 2Apr 28, 2009 10:43 am I think most builders want a 5% deposit at contract signing. Once contracts are signed, they start their ordering of materials. It would be unfair if someone only puts a little amount of money down for the deposit, and then i pulls out at the last minute. I think they are also covering themselves. Why doesnt your broker want you to pay the deposit? I would have thought that it shouldnt matter whether the money is used to pay the builder or sitting in your account? Idiots are fun, that's why there is one in every village! - Dr. House - Re: First Home Builder - Trouble Paying the 5% at contract sign? 3Apr 28, 2009 10:54 am Isn't the money in your bank account for the deposit there for occasions just as this? As long as you have the unconditional bank approval, you can now start using your deposit money to pay the deposit on the house and land? (Provided you're buying the land too). Also 5% less the 4k should only be about $5k (Provided your house is about 180k not inc. land). Unless you have a 100% loan with a bank you're going to need to use your 30k to fill the gap. For example. 95% loan on 350k = 332k Land = 175k Land 5% Deposit = 8.75k House = 175k House 5% Deposit = 8.75k Total Deposit required = 18k Deposit + Bank Loan = Total cost of house and land 18 + 332 = 350k Which means the bank will give you 95% of the loan and you need to make up the rest, whether you pay the 5% now or at the end doesn't make a difference as you will still need to pay 5% of your own money. With this, you then use the remaining amount in your bank + FHOG to pay off your loan with the bank. Hope this helps. ---------------------------------------- Building the PD Lisbon 24 http://www.porterdavis.com.au/#homeviewer/lisbon/24 Blog of our progress. http://lisbon24.blogspot.com/ Homeone build thread https://forum.homeone.com.au/viewtopic.php?f=31&t=28665 Re: First Home Builder - Trouble Paying the 5% at contract sign? 4Apr 28, 2009 11:21 am Aimeh I have just gotten off the phone with our broker and I am in need of some advice. We are building with M and they require a 5% deposit at contract signing less $3k for drawings and $1k for our initial deposit. We have over $30,000 dedicated to a deposit on our loan and our broker want's us to maintain this and so do we. He has said to speak to M and say that as we are FOHG recievers, our funds are tied up in the $29k to be paid when the slab is poured and to instead offer $2k - $4k instead of the 5% with the rest to come from the grant. Has anyone experienced this? What was the result? Our broker seemed to think it was routine as most home builders dont have 5% ****** around the place. We sure did experience this. It was around xmas time and we were not advised that we need the 5% at contract signing. We did not have unconditional bank approval at this stage. We were able to charge about 3k on our credit cards and they were happy with that. They did proceed with this and in a few days we had our DA. On our first invoice for slab the remaining 5% was added and our bank paid all this for us. I would discuss this with your Sales Consultant as ours was very helpful. We are in Queensland though. Re: First Home Builder - Trouble Paying the 5% at contract sign? 5Apr 28, 2009 11:52 am Okay thanks to all for the reply. I think we will have to do as Megzy has done, as we have purchased our land subject to getting planning approval, which has not come through as yet. So at this point in time all we have is pre-approval, not unconditioonal approval. I have only found out about the 5% charge through my own research, nothing has yet been mentioned by our sales consultant. I think I will speak with him about it. We should be able to pay the 5% and kee our deposit money for the bank at the same level - however if something unforseen happens then we won't be able to pay it so I think Ill just express that there is a fine line! Building our FIRST HOME - M3tricon Santorini 29 on 2 acres just West of Warrnambool Re: First Home Builder - Trouble Paying the 5% at contract sign? 6Apr 28, 2009 12:00 pm megzy Aimeh I have just gotten off the phone with our broker and I am in need of some advice. We are building with M and they require a 5% deposit at contract signing less $3k for drawings and $1k for our initial deposit. We have over $30,000 dedicated to a deposit on our loan and our broker want's us to maintain this and so do we. He has said to speak to M and say that as we are FOHG recievers, our funds are tied up in the $29k to be paid when the slab is poured and to instead offer $2k - $4k instead of the 5% with the rest to come from the grant. Has anyone experienced this? What was the result? Our broker seemed to think it was routine as most home builders dont have 5% ****** around the place. We sure did experience this. It was around xmas time and we were not advised that we need the 5% at contract signing. We did not have unconditional bank approval at this stage. We were able to charge about 3k on our credit cards and they were happy with that. They did proceed with this and in a few days we had our DA. On our first invoice for slab the remaining 5% was added and our bank paid all this for us. I would discuss this with your Sales Consultant as ours was very helpful. We are in Queensland though. alk ( h1 member) did the same thing. their initial 1500 deposit + 2000 got them through council etc. then the bank paid th balance of their 5% out of the loan. Living in Caloundra Thread****** Lovin my house all finished!!! Now tackling the HUGE task of the Garden- viewtopic.php?f=31&t=14782 Re: First Home Builder - Trouble Paying the 5% at contract sign? 7Apr 28, 2009 12:02 pm I have never built and this may be the norm, but I would be a bit worried about paying 5% deposit and signing a contract with M without unconditional finance. Does your contract with M say it is conditional on finance? Renovating a post-war house in Brisbane | On the first rung of the property ladder Re: First Home Builder - Trouble Paying the 5% at contract sign? 8Apr 28, 2009 12:04 pm Briz Ms I have never built and this may be the norm, but I would be a bit worried about paying 5% deposit and signing a contract with M without unconditional finance. Does your contract with M say it is conditional on finance? our contract wasnt conditional upon finance. we already had pre approval and broker suggested that it will be fine to sign contract. I did have a couple of sleepless nights though prioir to the final approval. Most of the standard HIA contracts are not subject to finance, however have a clause ( be able to show evidence to pay) eg if you dont show your pre approval cert or bankstatements or titlement of land. you can get out of it. Living in Caloundra Thread****** Lovin my house all finished!!! Now tackling the HUGE task of the Garden- viewtopic.php?f=31&t=14782 Re: First Home Builder - Trouble Paying the 5% at contract sign? 9Apr 28, 2009 12:08 pm mellybuilding Briz Ms I have never built and this may be the norm, but I would be a bit worried about paying 5% deposit and signing a contract with M without unconditional finance. Does your contract with M say it is conditional on finance? our contract wasnt conditional upon finance. we already had pre approval and broker suggested that it will be fine to sign contract. I did have a couple of sleepless nights though prioir to the final approval. Most of the standard HIA contracts are not subject to finance, however have a clause ( be able to show evidence to pay) eg if you dont show your pre approval cert or bankstatements or titlement of land. you can get out of it. I see! Thanks Melly - I would be having sleepless nights too Renovating a post-war house in Brisbane | On the first rung of the property ladder Re: First Home Builder - Trouble Paying the 5% at contract sign? 10Apr 28, 2009 12:14 pm Briz Ms I have never built and this may be the norm, but I would be a bit worried about paying 5% deposit and signing a contract with M without unconditional finance. Does your contract with M say it is conditional on finance? That is what we were worried about as first home owners. Turned out ok for us. Re: First Home Builder - Trouble Paying the 5% at contract sign? 11Apr 28, 2009 2:12 pm Our loan is onnly unconditional because we don't have posession of the land yet as planning has not been approved - we have been told it will be set by next week so fingers crossed!!! Because we wanted to have the one loan for house and land to avoid duplication of costs the loan cant be unconditional as we don't have the land yet Fingers crossed this will go down okay with our rep Building our FIRST HOME - M3tricon Santorini 29 on 2 acres just West of Warrnambool Re: First Home Builder - Trouble Paying the 5% at contract sign? 12Apr 28, 2009 7:50 pm We've found the reps at M sounds pretty forgiving. The banks are all badly burned by bad loans and staff layoffs and M knows it. Be prepared for things to take a little longer than normal though Trying this building gig one more time. Re: First Home Builder - Trouble Paying the 5% at contract sign? 13Apr 28, 2009 8:52 pm thanks virgin builder, we don't mind if it takes a little longer as long as we can have our name signed on the dotted line by june 30th thanks everyone! Building our FIRST HOME - M3tricon Santorini 29 on 2 acres just West of Warrnambool Re: First Home Builder - Trouble Paying the 5% at contract sign? 14May 01, 2009 4:09 pm Just incase anyone uses this forum as a future reference - M actually suggested we pay the 5% in the first lot of payments paid with our loan so it was A OKAY Building our FIRST HOME - M3tricon Santorini 29 on 2 acres just West of Warrnambool 1 2965 You talk about deletions, are they variations or PS and PC adjustments? pleas list them 1 16542 Hi All, I just wanted to close this topic out with an update. So we ended up agreeing to a number with the insurance company, and after an extensive amount of hand… 8 23388 |