Browse Forums Building A New House 1 Jul 09, 2012 2:30 pm Hi guys. We are getting to breaking point with loan approvals at the moment. We are buying a house and land 'package'. ***** have requested the 5% land deposit and have given us the contract for our conveyencer and 4 weeks for approval. Heres the problem. Our broker and converyancer is saying do not pay this until we have full unconditional approval from the bank. The bank however, can only give 3 month loan approvals and the land won't be title for 6 months. Problem is if we pay the 5% deposit on the land and even the 5% deposit on the house we will not be secured with loan approval and will have to reapply. It seems like a big risk - did anyone else come across this...why would they sell land if the titling is so far off, from what our broker says the banks conditions are standard. First home builder/buyer and in over our heads now. Would appreciate any help. Thanks. Re: 1st Time Buyer - loan approval issue 2Jul 09, 2012 6:22 pm Talk to your broker about approaching a different bank... or get a new broker. Perhaps lending criteria have changed recently, but not that long ago there were definitely banks around that would give loan approvals valid for 6 months and 12 months. Not many, but there were some. Tender /1/12 Contract 14/6/12 Planning 12/10/12 Site 23/10/12 Piers 27/11/12 Slab 12/12/12 Frame 15/12/12 Trusses 17/1/13 Roof 24/1/13 Bricks 13/2/13 Plaster 1/3/13 Re: 1st Time Buyer - loan approval issue 3Jul 09, 2012 9:44 pm Did you get a pre approval offer? 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! Re: 1st Time Buyer - loan approval issue 4Jul 09, 2012 10:33 pm Sounds normal to me, paid my 5% on my land in October last year and it titled a couple of weeks ago. If you can afford the loan now it should not be an issue when it titles unless you lose your job or something 1st Time Buyer - loan approval issue 5Jul 09, 2012 10:53 pm The broker is only passing on the banks requirements, they usually do not set the banks rules on approvals unless the broker is part of the bank staff and has that discretion. However you should be able to get pre approval on a set amount and if your circumstances don't change then I don't see why they won't lend the approved amount when you are ready to settle. One thing to watch out for is usually with a banks conditional approval, it is subject to "valuation" of the new property. If the value of the land and home is valued less by the bank to what the land/home cost is, then they may only lend up to a certain % of their own valuation (eg 80%). We had this problem with our land, they undervalued it to the market price by $20k and would only lend up to 80% of their valuation. We had sufficient deposit, but you need to see if your budget allows for this possibility so you don't get caught. 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: 1st Time Buyer - loan approval issue 6Jul 10, 2012 2:07 pm Thanks everyone. We are able to get a conditional loan for 6 months but we have been advised it is just like not having one. We have a full pre approval for 3 months validity and will re-do this when we are closer to getting the land title. The hopefully there will not be a problem with getting the loan. So looks like we will put down the deposit and hopefully circumstances do not change in any dramatic way. We have enough deposit that I don't think it would be a concern - but its stressful when you don't have that security of the loan approval. House and Land is just a whole other world for buying...hoping that when the deposit and contracts are signed we will be stress free until we start to build that is. So many horror stories out there we are trying to be careful. Very excited though. Re: 1st Time Buyer - loan approval issue 7Jul 10, 2012 4:46 pm Your contract should have "subject to finance" clause in it. If finance falls over then you should be able to get your deposit back. How and why is it taking 6 months for the title? Sounds odd They can't expect you to have all this moeny and buy something from them when they can't even give you title on it. Re: 1st Time Buyer - loan approval issue 8Jul 10, 2012 5:17 pm In this climate, I would be giving $1k max, and wait for the land to title. Subject to finance clause will also assist. Make sure it says 'subject to finance by "x" bank' if your not specific about the bank you could be forced to finance through something stupidly expensive Re: 1st Time Buyer - loan approval issue 9Jul 10, 2012 7:22 pm We got a preapproval as well, and our land valuation just came back $20K less than we paid, so the difference has to be paid out of our savings... this was money we were putting aside for fencing, turf, blinds for after the build. I think you will be okay, add the clause subject to financial approval like others have said. 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! Re: 1st Time Buyer - loan approval issue 10Jul 10, 2012 8:21 pm bjrouse How and why is it taking 6 months for the title? Sounds odd . so totally not odd, and is more in fact the norm. In fact most people will have a wait longer than what they are first told. Re: 1st Time Buyer - loan approval issue 11Jul 24, 2012 2:33 pm We have the subject to finance clause, but so far everything is going on time. Hopefully the land holds its value and we don't have any issues. Count Down until December is on when we can start the build process! Re: 1st Time Buyer - loan approval issue 12Sep 10, 2012 6:53 pm Hi Clare-Elise, We're hoping to buy in summerhill too, we've encountered quite a few hurdles so far. Looks like we're on the same page. We're told our land won't be due to settle until jan or feb 2013. I'm really concerned about valuations too. We won't be able to make up for a low valuation. Contact me on marniej01@gmail.com I'd you'd like to discuss anything further. It'd be nice to get to know someone in the neighbourhood ! Re: 1st Time Buyer - loan approval issue 13Feb 25, 2013 11:43 am Hi Marnie, How are you going with the delays? Did you end up purchasing in Stage 17? We've driven up a few time to find no changes as yet. I will be follow up this week as work was meant to start in February. I will let you know what I find out if you are in the same situation. Cheers, Clare 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 19068 Not much in this responce. My suggestion is, what are you looking to build and why. This will all be impacted by the local councils planning scheme. Familiarise yourself… 6 5840 Hi there, We’ve recently had plans approved to add a 1st storey addition to our existing house for a growing family in Sydney. With the current cost of building… 0 4275 |