Browse Forums Building A New House 1 Dec 07, 2012 10:53 am Hey. We have signed house/land contract and the land is about to settle. We still have some fairly major costs to add, and we didn't think much of it. We assumed we would just send the increase in cost to the bank and they would lend us the extra money by increasing our house loan. We have now been told by our broker that any costs after settlement will have to come out of our pocket and can not be put on the loan. There is technically room to move, so they would not need to do another valuation or anything like that. Is this the general practice? Doesn't seem right as most people make changes throughout the build, unless they simply pay it outside of the loan. I might try and contact the bank directly, but not sure whether I will be able to get exact details or if they'll just tell me to talk to my broker. EDIT: bank is CBA Re: Building - is it possible to increase loan after settlem 3Dec 07, 2012 11:17 am MR2 Ring the CBA Loans team and discuss Yeah I am, just thought that everyone here who has built must have run into this and would know how it works. Good to hear how it actually works vs what the broker/bank tells me as there are often discrepancies. Re: Building - is it possible to increase loan after settlem 4Dec 07, 2012 11:21 am tompab unless they simply pay it outside of the loan. That's what we have done. I guess it emphasises the importance of making sure that everything is covered within the contract. If it's not you will have to pony up the extra $$$$$. However, have a chat to your bank, there might be room to move, however it all comes back to valuations etc.. Re: Building - is it possible to increase loan after settlem 5Dec 07, 2012 11:23 am I re-worded this and shot it to my mortgage broker..will be interesting to see what he says... can I ask how much you went up by? we started pricing a place and though 350 would be fine for the house... at the moment we're somewhere around 410 :p Slooowwwwly getting a Manhatten 35 in Middleton Grange Re: Building - is it possible to increase loan after settlem 8Dec 07, 2012 12:33 pm The price keeps going up everytime we talk to them, it is very stressful. What we did only the other day was to talk to the design consultant or whatever she is called. We did all the colors and electrical and this alone added about $5k (3k electrical and lights, 1k off white mortar, $600 extra for the door (which we had already paid $1600 for, but they had added the wrong one), $250 for some drawers etc), which is not in the contract we previously added to the bank. Along with a bunch of other stuff. It is so incredibly stressful and even though we have tried to go through every detail, we are sure it will be more costs added too I talked to the bank, and they confirmed what the broker said. They said it was too hard to do it after settlement so we have to make sure we get everything in before that happens. I am trying to reach the builder now to get hold of the latest contract (or however this works, something official with the prices) as my broker needs it preferably today or at the very latest by Monday. There is no way everything will be covered as we still have outstanding items, but at least it should cover most of it. I wish someone would have told us earlier instead of just brushing it over and saying that it can easily be added as a variation, that way we would have made sure to sort everything out before signing and agreeing to all these deadlines. Re: Building - is it possible to increase loan after settlem 10Dec 07, 2012 12:43 pm Hi, Did you take out a land mortgage loan or a construction loan. In my case, I have gotten the bank to approve the maximum amount I can borrow and included variations with this. The amounts were not final however as the costs came in, we added this in - the bank reviews this before giving the commencement letter. Also account for any landscaping etc you will need to do for occupation cert. I would recommend you work out your maximum borrowing capacity with the bank and then also look at a redraw option - if you have equity against land that you can draw. The complication comes if you are borrowing more than 80% of the house valuation. Hope this helps. Cheers, Re: Building - is it possible to increase loan after settlem 11Dec 07, 2012 1:10 pm Yes. I originally applied for 296 and the broker upped it to 308 after we sorted the land. I didn't actually need the extra funds, but it just gave a bit of an extra buffer in case I wanted to hold on to that extra as cash. Building a Delta 21 at Craigieburn - http://homeofzero.blogspot.com.au/ Deposit: 26/02. Contract: 22/05. Settlement: 29/05. Site start: 18/10. Re: Building - is it possible to increase loan after settlem 12Dec 07, 2012 7:33 pm We are in a similar position. We thought we had added most things to the contract and due to buying the land privately had to to our finance application etc before prestart. Our prestart costs came in at over $10,000 for electrical, draws in the kitchen etc. I've managed to get it down to about $7,000 but we will have to find that money. Though we borrowed over the 80% so going back to the bank will be difficult. We have considered putting it on the credit card and then doing a balance transfer to a new card with one of the no or low interest offers, we will have it paid off quite quickly but have to pay it prior to the build starting so can't get it saved in time. The biggest challenge will be if you take out a loan and then run out of money - you'll have an incomplete security and lenders do not like this so you can get stuck.… 2 20100 How much are you ahead in payments compared to where the build is at? Have you fully drawn down the loan? 5 12381 Just to makea point about this, an approach that some people have found sucessful in negotiating these rises down, Is to provide some workings to the builder, specifying… 4 82866 |