Browse Forums Building A New House 1 Jul 03, 2018 8:54 pm Hi Guys, I have a question about a builder requesting the banks letter of offer which contains all the loan details on it, does the builder need this document or is an email from the bank saying that the loan has been approved is enough. Please forgive me if this is a dumb question it my first time building and feel that they don’t need to know that detail. Is this common practice in the building industry? Re: Builder requesting banks letter of offer 2Jul 03, 2018 9:14 pm unless you're self funding (which generally requires a account that both the builder and you can access) and copies of your current balance, you generally need a 'Authority To Commence Construction' from your bank. Basically contains the following; We confirm that finance has been approved to the above clients, to assist them in the purchase and construction of a new house at the above address. It is noted there are sufficient funds to complete the transaction. The Contract Price being $xxxx The loan will be funded by way of progress payments as per your contract. You should forward your invoice to our members for authorisation of payment, who will then on-forward it to ourselves Please note, progressive payments will only be advanced when our valuer is satisfied Securities Department Re: Builder requesting banks letter of offer 4Jul 04, 2018 10:49 am They need to know that you can afford to pay for the build, which means they need to know you have money in the bank or an approved loan. Re: Builder requesting banks letter of offer 5Jul 04, 2018 11:06 am Heap completely understand that they need to know that we have the funds, but needing to know how much we have borrowed, interest rate etc is not really their business I think.. As long as they know that the quoted amount is approved that should be enough I would have thought with the bank stating that of course. Just interested to know if anyone else had to supply the letter of offer? Re: Builder requesting banks letter of offer 6Jul 04, 2018 11:13 am Georgie00 Heap completely understand that they need to know that we have the funds, but needing to know how much we have borrowed, interest rate etc is not really their business I think.. As long as they know that the quoted amount is approved that should be enough I would have thought with the bank stating that of course. Just interested to know if anyone else had to supply the letter of offer? But they do need to know the amount. They need to know you have sufficient funds to cover the full cost of the build. We had to supply information including the value of the loan, cost of the land and proof we had sufficient funds in the bank to cover the shortfall. Re: Builder requesting banks letter of offer 7Jul 04, 2018 11:30 am Wow they wanted to know how much funds you had in your savings account... I think if the bank tells them that the loan is approved for the quoted amount and obviously telling them the quoted amount like Amish stated that should be enough, just my thoughts. Wondering if there are any regulations regarding this... Re: Builder requesting banks letter of offer 8Jul 04, 2018 7:20 pm Georgie00 Wow they wanted to know how much funds you had in your savings account... I think if the bank tells them that the loan is approved for the quoted amount and obviously telling them the quoted amount like Amish stated that should be enough, just my thoughts. Wondering if there are any regulations regarding this... LOL Regulations, there are no Regulations.. that is why there is a Banking Inquiry The bank will do a valuation on your build and that's is what they will lend I suggest you use some of the online property apps and limit your variations & spendings If your tender goes over that amount the Bank will ask you to dig into your savings.... hence you will need to show proof, bank accounts, spendings, employment records,etc hth Designer,Engineer (Civil,Const & Envir),Builder,Concrete & Masonry Contract.Struct Repairs Re: Builder requesting banks letter of offer 9Jul 05, 2018 6:31 am Our loan is for around half of the build price. In addition to the bank "Authority to Build' letter our builder asked for either a copy of a bank statement showing the balance of the build cost or a joint account between us and them just to guarantee the total build funds. Seemed reasonable and in the end they settled for a copy of the last page of our bank statement - which was a new account I opened purely for our portion of the build funds. Regards, Paul Re: Builder requesting banks letter of offer 10Jul 05, 2018 8:33 am Thanks for all the input guys seems pretty standard then for the builder to request for these private documents. Just wanted to make sure before I go and hand over my financial position to the builder The HIA contract, in the term & conditions section states that "Commencment" is deemed when the drainage is started or the piers are dug or the slab is formed up (incase… 2 6174 Hi Mofflepop, I would recommend finding a building designer to prepare plans, they should design to your specified budget. The benefit is you can tender the project out… 9 20401 |