Browse Forums Building A New House 1 Sep 17, 2009 3:32 pm Hi All Readers, We have purchased a land in Point Cook a year ago which is going to tilte in November. We have signed our construction contract in August. We have been approved (unconditionally) last month My question is :- We purchased our land in 165K and recently bank valued at $205K however our construction contract is $221k where bank valued at $203K.. Does it mean, once we start submitting construction invoice, bank will give us max $203k for construction only where final contract amount is $221k ? Does anyone have any idea about this ? P.S. Thanks in advance for taking time to read and reply Re: Bank valued &approved less than construction contract amount 2Sep 17, 2009 3:38 pm Your lender will normally lend your a max of 80% of the security value (that is without any mortage insurance becoming involved). So for land and construction loan they will add the two valuation amounts together and multiply them by whatever LVR you are borrowing - ie 80%, 90% etc. Some things are worth waiting for. Re: Bank valued &approved less than construction contract amount 3Sep 17, 2009 3:39 pm kam My question is :- We purchased our land in 165K and recently bank valued at $205K however our construction contract is $221k where bank valued at $203K.. Does it mean, once we start submitting construction invoice, bank will give us max $203k for construction only where final contract amount is $221k ? Unless they re-value the land and take into account the equity you have sitting in the land and possibly lend you the extra based on that, im not real sure TBH, sorry! Building Thread viewtopic.php?f=31&t=13002 Site start: 8th July 2009 Handover: 11/12/2009! 5 months total build time. 40 sqs of luxuary...Bliss! Re: Bank valued &approved less than construction contract amount 4Sep 17, 2009 3:59 pm kyton Your lender will normally lend your a max of 80% of the security value (that is without any mortage insurance becoming involved). So for land and construction loan they will add the two valuation amounts together and multiply them by whatever LVR you are borrowing - ie 80%, 90% etc. Thanks for the prompt reply...We are borrowing 84.6% including LMI .. question is does bank has caluclated everything on what we are contributing and approved $203k for the construction or bank valued $203k for construction means no matter how much i put in - will release upto $203k.. Sorry if i sound dumb but have no idea about how it does work .. Re: Bank valued &approved less than construction contract amount 5Sep 17, 2009 4:06 pm So if you are borrowing approx 84.6% it would mean:- $203,000 Valuation of construction + $205,000 Valuation of land ---------- $408,000 x 84.6% = $345,168 to do both the land and the actual build of the home plus any fees you are adding into the loan. Some things are worth waiting for. Re: Bank valued &approved less than construction contract amount 6Sep 17, 2009 5:03 pm kyton So if you are borrowing approx 84.6% it would mean:- $203,000 Valuation of construction + $205,000 Valuation of land ---------- $408,000 x 84.6% = $345,168 to do both the land and the actual build of the home plus any fees you are adding into the loan. Thanks for your reply and calculation.. Now i understood totally...$345K + deposit what i am putting + legal exp comes to figure what i need...thanks once again..its all clear now.. Re: Bank valued &approved less than construction contract amount 7Sep 17, 2009 8:58 pm I got caught out by this! Apparently most banks are under valuing house and land at the moment to try to protect them selves. Our block was valued 10k less then what we paid even though we had got it for a reasonable price. Now waiting on our construction loan to be approved but have been cautioned by the bank that they are unlikely to value the house at the contract price. Regardless of our pre approval amount our bank will only lend us 95% of what their evaluation figure is. nothing to do with salespeole. you'd do well to read and ccomprehend the post before bashing away at the keys with some negative comment again. 4 5061 at most it will have a short lintel which could be moved up just below the ceiling or even above. Above means you need to patch the cornice and might need to deal with… 2 57715 If your patio is going to be 35 sqm then that's going to need Council Approval. The fact that they previously approved your 25sqm patio will be irelevant 1 2709 |