Browse Forums Owner Builder Forum 1 Mar 08, 2012 7:32 am Hi there, We're having a few problems with one of the major banks with our OB loan application.... they seem to want us to show that we don't need the money to construct our home (asking for 40-50% deposit to cover overruns!). So who is everyone else going through and how do they work? Do you set up your stages to be paid our for? Really appreciate your help with this one! Betina Jem's Custom build - viewtopic.php?f=31&t=58630 Finance - who are you with? 2Mar 08, 2012 7:40 am Most lenders who do OB loans will only do a 60% lend - Westpac is one of them. They also have very strict rules covering OB loans ie the documentation at each stage is fairly extensive plus the home has to be complete within 12mths of drawdown etc. If you have other property to use as equity you can sometimes borrow extra rather then just the 60%. There are no doubt minor lenders who will do higher LVR lends but look into the fees / charges / interest rates. Some things are worth waiting for. Re: Finance - who are you with? 3Mar 10, 2012 9:40 pm We were lucky - we managed to get a Line Of Credit through CBA. Its basically a massive credit card that we could use as we wanted so they didnt ask us for costings etc because they didnt know what we were putting the money towards - it was ours to do as we pleased Custom European Cabinets - Melbourne Kitchen Specialist PM for business details as website currently being updated! Our Crazy Owner Builder Journey! Re: Finance - who are you with? 4Mar 13, 2012 10:26 am Precursor - everyone's situation is different in regards to what collateral you can demonstrate. This needs to be taken into consideration In NSW (Not sure if it is different depending on states), we basically had 2 choices - NAB or St George (owned by Westpac) Our situation is that we owned the block outright and used that as collateral. Both banks basically put me through the ringer... The way both banks worked with us was that they looked at the AS BUILT value of the block, said that they would give me 60% of that (within my means of course) and then it was up to me to show savings, collateral, etc. If I didn't have the block, I don't know HOW I would have been able to pull it off. I had to fight with them regarding the progress payments as well. They wouldn't give me the first draw down until work certain works had been completed. I made it VERY clear to them that NO concreter will just go and put a slab down without some sort of progress payment. they basically said we will reimbursable me $80k at a time. In the end, I managed to get them to give me 'line of credit' function where they would give me $80k upfront and the would reimbursable me this as it depleted over the course of the build. Every time I want more cash, they need to do an inspection AND I need to provide invoices. Sometimes im not sure who is working for who in this relationship... Re: Finance - who are you with? 5Mar 13, 2012 9:18 pm I'm still recovering my dignity from an appointment with our building society a couple of weeks ago. We had borrowed to buy our land and used money from the sale of our house to fund the owner build - all was going along smoothly, I had the costings pretty well accurate, until Husband decided he'd like a new car......not wanting the headache of financing it we paid cash and thought to ourselves it would be no worries to get a bit extra from the bank if we needed it at the end.....silly us!!! For the measley amount we were asking for, and in comparison to what we had spent/acheived with a mortgage at less than 70% of the land value we were stunned at the hoops they held up for us to jump through. They also would not lend us the amount we were asking for: their theory is that owner builders overspend by 10% and they allow for that by lending the extra at the beginning, so they calculated the 10% based on ALL we had spent to date and added it to the amount we asked for - basically doubling what we needed. Fees were high considering we paid no fees when taking the mortgage out on the land purchase, and they wanted to control payments which we felt lost us a fair bit of the "bargaining" power we have become used to. There were other requirements they tabled as well, but that had to do with the fact that I am self employed (although my husband has been a public servant for 30 years at the same place of work all that time) We walked away after saying a polite "Thankyou for your time, we feel we can scrape through" No wonder the project homes are doing such a roaring trade these days. I couldn't face another dressing down from another institution so we'll just manage as best we can...the driveway will have to wait, and so will the carpet - but I'll stand back at the end of the day and feel proud of what we have acheived!!!! (sorry to rant a bit - it's been knawing away at me....and I know we're partly to blame for buying a silly new car and that makes me feel even worse ) Owner Building on 1800sqm Sanity Intact so far Locked up March 2012 you were just referred to get advice from your solicitor. This is a legal matter. Separately, why would you use a buyers agent for a house and land package? 3 55284 Looking to start the journey of becoming an owner builder in SA. Feeling pretty (overly) confident on the building and construction details, but really struggling to find… 0 8397 No. It's not original. Circa early to mid 90s would be my guess and maybe even as late as early 2000s 1 6626 |