Browse Forums Building A New House 1 Jul 17, 2016 11:12 am Hi Everyone, Can someone please explain how this works. We have purchased an old house that we are going to demolish and build a new property with Urbanedge. We have our tender/colour and electrical appointments coming up in September with our contract signing in Oct. It's been a while since I've built, so I'm not sure if I have this right, but am I right in thinking that following the contract signing, we would submit the contract to the bank for bank valuations and to be done to be given the final approved amount for the new build. Now, I'm assuming that I wouldn't be demolishing the house UNTIL the bank vals and approvals have come back in. Is that right?? I'd hate to demolish, then the bank approval falls through due to low val and then I have no house left to sell or rent!! Can someone who has been through the process please tell me how it works. To give you context: We have lived in our current home for 12 years and have paid that off in full. This new house was bought a few months ago with the purpose of knocking it down to rebuild a new home which we will live in once it is built and our current home will be sold. Thanks! Re: Knock Down and Rebuild Question- please help! So confuse 3Jul 18, 2016 3:54 pm Hi ayaman, In my experience after signing a contract if it is sent to the bank for valuation/approval then once that is ok with the bank you then pay your 5% deposit as per the contract whatever yours may be, then the builder has 21 days to start the build. Again this is defined in your contract and could be different. I'd have a talk with urbanedge and explain your concern to them too. Re: Knock Down and Rebuild Question- please help! So confuse 4Jul 19, 2016 1:51 am We are nearing the end of our KDR process. We had organised the demolisher, got council approval for the house to be demolished etc before the mortgage was approved but we did not go ahead with demolishing the house until we had full approval for the build portion of the loan. This meant we went through all selections, prestart/final builders interview, council approvals etc for the build before the house was demolished. I could just imagine knocking the house down and then not being approved for the loan and having an empty block of land instead of house + land to sell! Re: Knock Down and Rebuild Question- please help! So confuse 5Jul 19, 2016 8:16 am As you currently own your own home which you intend to sell you will not require 100% finance in the long term which should give you the opportunity to still build even if the valuation is low. The banks main interest is that your final mortgage is less than the valuation. I would start discussing the issue with your mortgage provider/broker. Alternativly sell your existing house and rent during the build period. The Harder You Try - the Luckier You Get ! Web site http://www.anewhouse.com.au Informative, Amusing, and Opinionated Blog - Over 600 posts on all aspects of building a new house. Re: Knock Down and Rebuild Question- please help! So confuse 6Jul 19, 2016 8:21 am This was posted from my thread. Posted: Jul 12, 2016 10:39 pm "This is for anyone who have decided to have DA approval by council....( especially my council ) Do not move out of your house until you have CC from your local council. We moved out from our house back in June 2015 .....as our DA was applied early March 2015 and we assume the DA will take only three month. Do not demolish your home until you have CC from council. We have demolished our house mid March 2016. We can not move back in... no more house. Luckily we are living at our investment property (no agent to kick us out) not renting . The down side is... no income from rental property which increased repayment on the mortgage. Totally out of budget. Loss of income for 1year, now it will be another 1year or more for house to build. Our house building budget blown off the roof. " Hope this will help. viewtopic.php?f=31&t=81624 Re: Knock Down and Rebuild Question- please help! So confuse 7Jul 19, 2016 1:23 pm We are currently doing a KDR (about to start the construction phase) and were in a similar position to you in that we had paid off our old house and bought another property (better site) for our build. We considered doing what you're proposing but when we sat down and did the sums it became obvious that the interest on the loan for the new property plus the build cost (plus the extra KDR costs) was much higher than the cost of a rental in the area. Also, do bear in mind that the KDR process can take a long time. We've taken 9 months in admin time since we selected a builder. And that was for a design that did not require any special approvals. Others on this forum have taken even longer than that. So I would second what Bashworth has already suggested. Talk to a mortgage broker and do your sums. Make sure that it's the best option for you financially. Yes, it is inconvenient to have to prepare your existing home for sale and find a rental but it may be worth it. The other advantage we found in refinancing as we have done is that a construction loan was not required. We have more than enough redraw available to cover our build and the loan is for less than the land value of our property so the bank did not need to see detailed plans and do additional valuations. We will simply redraw stage payments when our inspector is satisfied with each stage of the build and the bank does not need to be involved at each step. That gives us more flexibility and eliminates one possible source of delays. Just another perspective to consider. Hope that helps in your decision-making. We've had the offer of a short term tenant whilst waiting for CDC/DA home approval and demolition for our knock down rebuild. It would achieve a pretty low rent as it's… 0 13750 Hi I live in a 100yr old semi and my neighbour added an additional floor last yr and our architect has advised that we can knock down our semi and build a free-standing… 0 37693 If this is a custom build then I would expect the builder to set out the door frame closer to the wall to avoid the gap between architrave and the wall and or specify… 9 8306 |