Browse Forums Building A New House 1 Jun 28, 2012 3:22 pm Stupid question warning.... We have put down a deposit on a piece of land and a deposit with a builder. I have been pushing the builder to get the contracts delivered in time for the finance approval dates so we can tie in the land and build mortgages. The builder has now said we can't do our colour selection or pre-start meetings until August (which is after our finance approval dates) so I have gone back and said 'not good enough' we want to include our electrical and pre-start costs in the loan application so need the fixed price contract to include all variations. They have said it doesn't work that way.... So - did you include your variations / upgrades in your mortgage application? I'm really confused about the process. I just thought the builder would be able to price up everything we want, we agree to it, toddle off to the bank to apply for the mortgage and go from there - have I got it wrong somehow? Thanks in advance Building the Nautilus with Dale Alcock follow my thread: viewtopic.php?f=31&t=58854&p=909574#p909574 14/8/12 Pre-start! Re: A question about the process (finance, contracts and lan 2Jun 28, 2012 3:55 pm The builder is right with the process.
Get "inflated" quotes for all the extras you want and then send them with your loan application. i.e house contract price 300k, Extras are 50k. then get a loan for 350k That is what we are doing with our build Re: A question about the process (finance, contracts and lan 3Jun 28, 2012 3:56 pm The bank want the fixed price contract though and that is all they will lend - i.e. they won't lend more than we need contractually hence wanting the pre-start costs in the contract..... Looks like I might be cancelling the build at this rate!! Building the Nautilus with Dale Alcock follow my thread: viewtopic.php?f=31&t=58854&p=909574#p909574 14/8/12 Pre-start! Re: A question about the process (finance, contracts and lan 5Jun 28, 2012 4:23 pm we went to the bank and asked how much we could borrow on our income and got a pre-approval based on that. that was to last for 3 months, but we never got to final contract $$$$ until after that. was no trouble with the bank as we just explained what was going on with builder etc etc, and they just extended it until we did get the final contract price after prestart, and then we went and got the formal approval. i dont know if your FHB, as we are not, so im not sure if that would make a difference. stick with it. the first part of the journey does seem to be full of ''catch 22's'' . just keep asking yr builder/bank for next step. Re: A question about the process (finance, contracts and lan 6Jun 28, 2012 5:33 pm GardenofNeedn-58 we went to the bank and asked how much we could borrow on our income and got a pre-approval based on that. that was to last for 3 months, but we never got to final contract $$$$ until after that. was no trouble with the bank as we just explained what was going on with builder etc etc, and they just extended it until we did get the final contract price after prestart, and then we went and got the formal approval. i dont know if your FHB, as we are not, so im not sure if that would make a difference. stick with it. the first part of the journey does seem to be full of ''catch 22's'' . just keep asking yr builder/bank for next step. Thank you! Perhaps it's specific to the bank we are applying to (homeside (NAB)) but they want the fixed price contract and it's not up for discussion so I guess either we include the pre-start costs or we don't. If we don't we will have to pay for pre-start by other means. I will keep harrassing the builder and see how we go! I just hope at some stage this 'build your own house lark becomes fun rather than just stressful and confusing Building the Nautilus with Dale Alcock follow my thread: viewtopic.php?f=31&t=58854&p=909574#p909574 14/8/12 Pre-start! Re: A question about the process (finance, contracts and lan 7Jun 28, 2012 5:57 pm By adding variations you risk the bank under valuing the house and not lending money at all or u needing to pay lmi or bigger deposit. Just save money and use cash for variations that's what most ppl do the more u ask for above what is considered a standard house in ur area the more risk u have or bank under valuing. http://www.betterthansheets.com.au - Why use sheets for curtains in your brand new home use Better Than Sheets Temporary Paper blinds instead! Re: A question about the process (finance, contracts and lan 8Jun 29, 2012 10:02 am suspct By adding variations you risk the bank under valuing the house and not lending money at all or u needing to pay lmi or bigger deposit. Just save money and use cash for variations that's what most ppl do the more u ask for above what is considered a standard house in ur area the more risk u have or bank under valuing. I would love to save the money but I would also like to move into a house thats finished sometime in the next 5 years!! Lol We have to pay LMI anyway and the chances of us saving the $40k of pre-start I am estimating are slim to none! The bank will lend us the money - just need the costs to be included in the application, but after a long chat with the CLO last night I think we are getting somewhere! Thanks everyone Building the Nautilus with Dale Alcock follow my thread: viewtopic.php?f=31&t=58854&p=909574#p909574 14/8/12 Pre-start! Re: A question about the process (finance, contracts and lan 9Jun 29, 2012 11:18 am Of course the costs are needed with the application. Just send them a quote for everything. If you want an extra 40k just get a landscaping quote for 40k. if doesn't matter what the quote is for, just a $$$ value. Then when they give you the money spend it on what ever you like Re: A question about the process (finance, contracts and lan 10Jun 29, 2012 1:21 pm We included a provisional amount in our tender for items that we were planning on upgrading, such as electricals, kitchen etc. The tender was then provided to the bank. The bank will then complete a "end" valuation of your home based on the tender and the location of your land. Our bank accepted the tender valuation of the house. Unless you have gone crazy in your upgrades, then the tender should be sufficient documentation for your home value. We then received conditional approval, subject to the bank receiving the signed contract. Can the builder include provisional amounts in your tender? Then you can provide that to the bank and hopefully they can give you pre approval at least, before you sign the contract, so you at least know the bank will lend you the money and how much. But all banks and their internal processes are different, so what one bank wants before approval can be different from another. Good luck! We built the Wisdom Majestic 40 - moved in! Our blog - http://ourwisdommajestic40.blogspot.com.au/ Our H1 thread - viewtopic.php?t=54156 Re: A question about the process (finance, contracts and lan 11Jul 04, 2012 1:29 pm Hi emmanewman. My partner and I had the same 'hurry up and wait' with our build contracts (they took 9 weeks) and we couldn't get finance approval before we got the contracts. However, we signed our contracts on 5 Dec, did prestart on 16 Dec and then got our finance approval on 23 Dec. Our builder usually does the contract signing on the day of prestart so that it all goes in together. However, we spent $2,000 over and above at prestart which we are paying for in cash ourselves (so it wasn't included in our finance). Hope that helps. Good luck! Re: A question about the process (finance, contracts and lan 12Jul 04, 2012 8:39 pm We got a preapproval too. We showed our incomes and they said based on X, you can borrow Y! Can your bank not also do this? We are with ANZ... our preapproval is conditional, we need to show them the Land Contract (done), then the tendered agreement (yet to do - hoping by next week- this will also be before colours). Our land settlement and 5% deposit will basically be due the same date, the bank will pay out the land amount and we will pay the 5% out of savings. We know our limit and that's how we will stick to budget when we do the colour stage. Built a Hawthorne 31 with EB nessjeffdreamhouse.blogspot.com.au Building an investment now with New Living homes... We are at nearly finished... Just landscaping and driveway to go! Thanks very much! And would the landscaper/contractor generally involve the engineer or is that something the client would do? Thanks for your help 2 10141 MBA and HIA both have sub contract agreements, check them out 2 7399 Industry type domestic contracts are prepared by industry bodies for the benefit of the builders. This means that if you are the owner watch out. One of the points is… 0 3276 |