Browse Forums Building A New House 1 Nov 11, 2012 2:19 pm Hi all I really need some help please. I really am having trouble understanding the approval process with our land and build at the moment. Our mortgage broker called us the other day, and completely freaked us out. He was worried about not getting full financial approval in time for settlement on 21st December. This is what has happened so far: 27th August: Signed contracts for land and build. 2 weeks later (ish): Sent off our external (pre) selections. 10th October: Received a letter from our conveyancer saying that the plan of division has been approved by onkaparinga council, would be put forward to the Lands Title Office which would take 4-6weeks. They said they would then be in a position to arrange settlement. We were also told to contact our financier to let them know of the current time frame. 18th October: Call RealtySA (land) to tell them we need to extend our finance due date and settlement (was due 21st oct and 15th nov for settlement). 24th Oct: Received a change in our due dates to 5th Dec for finance and 21st Dec for Settlement. 2nd Nov: Received a letter from our conveyancer saying that the plan of division has been deposited in the Lands Titles Office and settlement is due by no later than 21st Dec. Please contact the financier etc etc. At this point, the land has not titled. I assume it'll happen within the next week or 2. From what I understand though, once the land has been titled, it goes back to council for build approval? Then once build approval is given, we can have our final builders interview which will give us our final specifications/cost. Then once we have our final specifications, we can then forward that to our mortgage broker to organise full financial approval. Our mortgage broker said that this process would take about 4 weeks. Does this all sound normal? Or correct even? I'm just not sure what happens next, and I've had a pretty full on panic attack earlier today. The conveyancer also said they would forward a settlement statement as soon as the financier advises them of the amount they would be forwarding. I don't get this bit? How can my bank forward this amount when we haven't had the final builders interview? Can someone please help me understand this process? I'd really appreciate it. Thank you Feel free to follow our build! viewtopic.php?f=31&t=59958 Re: Please help me understand! 2Nov 11, 2012 2:25 pm I suppose it depends on the lender, but I don't think you need council approval to get your final loan approval. We definitely didn't. Sounds like you need to ask your broker for clarification. From my experience of two previous purchases and our current pending build, all these stresses are pretty normal. It always seems to feel like it's going to completely fall apart before it comes together. You will be okay. Building the Ascot 35 with Carlisle Homes in Pasadena Estate, Clyde VIC My build thread: viewtopic.php?f=31&t=59776 Re: Please help me understand! 3Nov 11, 2012 2:44 pm Thank you Our lender (ANZ) requires council approval before we get full financial approval. I do feel like its falling apart... It's now been held off for 2 months! We are in the process of getting them to move the finance due date until the 9th Jan, and settlement on the 25th Jan. Any one else know if this is right? Feel free to follow our build! viewtopic.php?f=31&t=59958 Re: Please help me understand! 4Nov 11, 2012 3:15 pm We are also with anz.. We applied for a construction loan. Is that what you did? Of which they gave us a pre approval $$$ They lent us the land component first. We settled on the land back in july. The bank gave us that amount only and we have been paying that off ever since. The loan was still conditional to having council approval, contract etc. as we gave them paperwork they revalued the land and build, and recently like mid October they made they loan unconditional and gave us the authority to commence construction. We will have to pay our builder installments at each stage. We just notify the bank and they will transfer the funds Did you buy a home and land package? Do they want you to pay in installments or 5% now and the rest at completion? 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: Please help me understand! 5Nov 11, 2012 3:21 pm We have purchased the land and house separately, but through the same group of companies. We have the option do do the land separately, but dont want to have to start paying yet. I think the issue is that the builder wont let us have our final builders interview/specification until we have council approval. And we can't get full financial approval until we have our final specification. Feel free to follow our build! viewtopic.php?f=31&t=59958 Re: Please help me understand! 6Nov 11, 2012 3:27 pm We also purchased the land from one company and the house from another... When you say final builder's interview... What do you mean? Have you paid a deposit and received your contract? I assume you did in august. You could make the land component interest only loan payments until you move in... We are paying our land component principal plus interest, and all other installments interest only until we move in. 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: Please help me understand! 7Nov 11, 2012 3:31 pm Don't forget, that in your case, like in ours, BEFORE documents are lodged for council approval you need to obtain encumbance manager's approval. That should be taken care of by the builder, but adds up time to approval process. Re: Please help me understand! 8Nov 11, 2012 3:33 pm I don't know what type of loan you applied for, because I know when we start withdrawing payments for the build, we start paying installments... Do you not pay until you move in? 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: Please help me understand! 9Nov 11, 2012 3:41 pm Our final builders interview is where we go over everything for the build, and do our final external colour choice, go over electrical plan, and add up the final cost of everything. We won't start paying anything until after settlement. We have signed those papers, memorandum of encumbrance and transfer. Feel free to follow our build! viewtopic.php?f=31&t=59958 Re: Please help me understand! 10Nov 11, 2012 3:44 pm I get where you're coming from, sammy, we are in a similar situation. I would recommend that you shop around for banks that don't require council approval before you get your loan approved. One of the banks we talked to told us the same thing, but our broker (who is working with Homeside) told us they don't require that. It's a PITA when everything is catch 22 like that. I don't understand why your builder can't supply you with a fixed price (final interview) before submitting to the council approval though? Won't they need all that information about what you're getting on/in your house before council can actually approve it? I know our house is getting an extension added to the original plan, which would need approval by council, so there is no point in sending in a request for approval for a plan that might still change. I was always under the impression that the council approval came after the fixed price was determined. Settlement: 10.02.13 Slab: 06.03.13 Frame: 08.03.13 Lock-up: 05.04.13 Handover: 03.06.13 Build thread: https://forum.homeone.com.au/viewtopic.php?f=31&t=59555 Brisbane Photography Re: Please help me understand! 11Nov 11, 2012 3:56 pm I will have to speak with the mortgage broker again tomorrow and see what he has to say about going to another lender. We have a build price already of $181k, but have spent about 15k in extras which still need to be added to the final cost. We also haven't done our electrical and lighting plan which will also be at a cost. I'm so completely lost! Feel free to follow our build! viewtopic.php?f=31&t=59958 Re: Please help me understand! 12Nov 11, 2012 3:58 pm What you've signed is your agreement for those conditions, i.e. ecumbrance etc. But there is a clause in a land purchase agreement that specifically states, you should obtain encumrance manager's approval before you seek council approval for any building activities. Normally builder takes care of that. They prepare all the plans after your selections are finilised and obtain an approval from the encumbrance manager. That means that ecumbrance manager checks whether your planned building violates "South" design guidelines and any additional encumrances, like undeground easement etc. Since encumbrance manager is essentially from the same company group as you builder actual approval might not take long. But it should happen anyway prior lodging all the plans to council. Re: Please help me understand! 13Nov 11, 2012 4:01 pm Arggghhhhh!!! Its taking forever!!! Sometime I just wish that we'd bought established! LOL Feel free to follow our build! viewtopic.php?f=31&t=59958 Re: Please help me understand! 14Nov 11, 2012 9:43 pm Still freaking out! It's so annoying when this happens on a weekend as I can't call the appropriate people! So if we need encumbrance approval before council approval, then how the hell do we have our final builders interview? We were told we need council approval before we have the final interview. :S Feel free to follow our build! viewtopic.php?f=31&t=59958 Re: Please help me understand! 15Nov 11, 2012 9:49 pm It sounds like you need to have a serious chat with your builder & broker to get some clarity. Something isn't lining up here. Rest, (wine assisted if needed ) and deal with it tomorrow. The sun will come up, I promise. Building the Ascot 35 with Carlisle Homes in Pasadena Estate, Clyde VIC My build thread: viewtopic.php?f=31&t=59776 Re: Please help me understand! 16Nov 11, 2012 10:16 pm I'm not sure if it's the same in SA as WA but we have applied for a construction loan, our land settles next week and the bank will release money for that but they won't release any of the construction money until we have council approval for the build, our house is actually being sent for approval prior to prestart.... Our letter from the bank says we have to let them know if our building contract changes so I am assuming well have to let them know about upgrades at prestart, though our plan is to pay for those few things from our own pocket.... We included most of our upgrade prior to contracts being signed. Good luck. I think the best advice is to make some phone calls tomorrow!! Re: Please help me understand! 17Nov 12, 2012 12:37 am We can do that if we choose, but we didn't want to do it all separately. Seems like now it'd be easier to do it that way! :S Feel free to follow our build! viewtopic.php?f=31&t=59958 Re: Please help me understand! 18Nov 12, 2012 1:36 pm I think we may have our problem solved!!! PHEWWWW!!!! I spoke to a bunch of VIP this morning.. Land sales guy, construction sales guy, conveyancer, and our mortgage broker. What we have decided is that: 1. We will do our land loan separately. There was no additional fee for this. We should be signing the papers for that on Thursday. That should take a couple of weeks to go through. Because of this, we can settle on time (or even earlier!). 2. We have council approval (not full development) and land title. Was misinformed last week about this. 3. We are going away on Friday for 2 weeks (kind of a bad time!) and have now booked our final builders interview for 3rd December. 4. Were told by Fairmont that we should have FDA within the next few weeks and that this can occur before the final builders interview/specifications. 5. Once Fairmont have the paperwork for FDA in a few weeks, they will forward that to our mortgage broker. 6. Our mortgage broker can then submit this for full financial approval for construction (will still take about 4 weeks). So if we get FDA in 3 weeks, thats 3rd Dec. 4 weeks from then is 31st Dec. That hopefully means that we can start the balling rolling straight after Christmas break! 7. Our encumbrance approval has already been given. 8. All we have to do now is sign our mortgage papers, have builders interview, and wait!!! 9. I feel much better now! 10. Thank you to all of you wonderful, patient, and AMAZING fellow homeone forum users and my new neighbours for putting up with my stresses and panic attacks! Feel free to follow our build! viewtopic.php?f=31&t=59958 Re: Please help me understand! 20Nov 12, 2012 6:29 pm I'm also glad it is sorted. Enjoy your holiday! Can't wait to see your build start! 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