Browse Forums Home Finance Re: Construction loan with 88% LVR 2Apr 28, 2021 8:52 pm Nab is an automated system - what they refer to as their "internal credit score", and yes it is tighter now... but that said - you are an existing client of theirs and hopefully have good history with them - has it been submitted? If not, worth a shot. Its not impossible. Over 90% (they don't do construction over 90%) it's very hard to get an approval now. Good luck!! Rebecca Jarrett-Dalton Property crazy expert mortgage broker, love building new homes! Two Red Shoes mortgage broker http://www.tworedshoes.com.au/building Re: Construction loan with 88% LVR 3Apr 28, 2021 9:36 pm becjarrettdalton Nab is an automated system - what they refer to as their "internal credit score", and yes it is tighter now... but that said - you are an existing client of theirs and hopefully have good history with them - has it been submitted? If not, worth a shot. Its not impossible. Over 90% (they don't do construction over 90%) it's very hard to get an approval now. Good luck!! My agent have submitted but the System rejects and they are unable to give any reason for it. We have an LVR of 88% but still rejects.. is it worth to switch my land and construction loan to different bank ? What will be the cost involved out builder is awaiting an approval from the bank and currently we are renting. Waiting for another 6 months is going to cost us the rent anyway. Re: Construction loan with 88% LVR 5Apr 28, 2021 10:23 pm Fore2 Get your agent to submit your application but NOT through there system. They must have a BDM that can help with it getting submitted. If its that tough I would go elsewhere My agent is talking with their BDM but what they say is they can't overide the system. Re: Construction loan with 88% LVR 6Apr 28, 2021 10:25 pm Karthik_K Hello All, Sorry for the long post. I came here for your inputs on the trouble I have to get a construction loan with 88%LVR in NAB. Here is my situation 1. Bought a land with 90%LVR last year June 2020. 2. with saved deposit + Increase in land valuation I applied to a construction loan with 88%LVR But my agent mentions that NAB system is getting my application rejected even if the credit assesor is happy to approve it. He mention that if we have 85% LVR we have a possibility to get it approved. But to have that 85% I need to save another 30K, which I will have to wait for 5-6 months. Borrowing capacity is not an issue as we are well within the limit. Can any one suggest is 88%LVR not enough to get the construction loan approved ? I am seeing people with 90-95% getting approved. Is option of moving the loan entirely to another bank make sense ? (LMI will be lost). Inputs are much appreciated. it maybe one of those score card decline, if this is the case, it's hard to overturn the decsion and they don't need to give you any reason. you may have to try another bank. if you have got you previous land loan approved at 90% LVR, has your account conduct changed after the loan i.e covid 19 impacted etc. Re: Construction loan with 88% LVR 7Apr 28, 2021 10:30 pm Flamingo Karthik_K Hello All, Sorry for the long post. I came here for your inputs on the trouble I have to get a construction loan with 88%LVR in NAB. Here is my situation 1. Bought a land with 90%LVR last year June 2020. 2. with saved deposit + Increase in land valuation I applied to a construction loan with 88%LVR But my agent mentions that NAB system is getting my application rejected even if the credit assesor is happy to approve it. He mention that if we have 85% LVR we have a possibility to get it approved. But to have that 85% I need to save another 30K, which I will have to wait for 5-6 months. Borrowing capacity is not an issue as we are well within the limit. Can any one suggest is 88%LVR not enough to get the construction loan approved ? I am seeing people with 90-95% getting approved. Is option of moving the loan entirely to another bank make sense ? (LMI will be lost). Inputs are much appreciated. it maybe one of those score card decline, if this is the case, it's hard to overturn the decsion and they don't need to give you any reason. you may have to try another bank. if you have got you previous land loan approved at 90% LVR, has your account conduct changed after the loan i.e covid 19 impacted etc. Sorry didn't get that account conduct thing..we were not impacted by COvid.. we are showing that we are consistent with our savings in the past 7 months after land purchase. No defaults in loan or credit card. Credit score is very good. I am not sure what it might be... Re: Construction loan with 88% LVR 8Apr 28, 2021 10:33 pm Karthik_K Flamingo Karthik_K Hello All, Sorry for the long post. I came here for your inputs on the trouble I have to get a construction loan with 88%LVR in NAB. Here is my situation 1. Bought a land with 90%LVR last year June 2020. 2. with saved deposit + Increase in land valuation I applied to a construction loan with 88%LVR But my agent mentions that NAB system is getting my application rejected even if the credit assesor is happy to approve it. He mention that if we have 85% LVR we have a possibility to get it approved. But to have that 85% I need to save another 30K, which I will have to wait for 5-6 months. Borrowing capacity is not an issue as we are well within the limit. Can any one suggest is 88%LVR not enough to get the construction loan approved ? I am seeing people with 90-95% getting approved. Is option of moving the loan entirely to another bank make sense ? (LMI will be lost). Inputs are much appreciated. it maybe one of those score card decline, if this is the case, it's hard to overturn the decsion and they don't need to give you any reason. you may have to try another bank. if you have got you previous land loan approved at 90% LVR, has your account conduct changed after the loan i.e covid 19 impacted etc. Sorry didn't get that account conduct thing..we were not impacted by COvid.. we are showing that we are consistent with our savings in the past 7 months after land purchase. No defaults in loan or credit card. Credit score is very good. I am not sure what it might be... it's hard to say, every bank has their own internal scoring system, when they submit your application, it will go through their own system for their existing customer, account conduct is more like your account behaviour if there are unarranged overdraft/dishonour payment etc. Re: Construction loan with 88% LVR 11Apr 29, 2021 10:56 am Try any of the big 4... Have you paid LMI on your land? if so then you will lose that and need to re pay at a new lender - But check as I know Genworth offer a refund within i think it is 2 years so can get some back. Re: Construction loan with 88% LVR 12Apr 29, 2021 11:37 am doesnt sound like you have much choice. Go elsewhere. Id suggest not discounting non bank lenders. They typically are more flexible in how they approach lending. Dark matter scientist, can breathe underwater, mind reader and can freeze matter just by willing it. Trust me, its in my sig. Re: Construction loan with 88% LVR 13Apr 29, 2021 3:34 pm Karthik_K Any Recommended good bank for my scenario .. construction loan with 88% LVR Before you move, you may worth to check with your bank directly and asking if there are anything they can do. In your case, you paid LMI, for your land loan at 90% lvr you probably have paid approx $10k LMI, it’s a loss. Re: Construction loan with 88% LVR 14Apr 29, 2021 3:56 pm They've asked already. Banks change credit policy all the time. If this was a H&L package that was assessed at the same time, but there was a delay on the construction portion due to titles or something, chances are they'd be flexible because of the credit policy that was used to underwrite the lot. But the OP bought land, sat on it, then went for a second loan a year later. Credit policy has changed. Bank doesn't care if you make a loss on LMI when you move. Its there to protect them from your potential risk. Dark matter scientist, can breathe underwater, mind reader and can freeze matter just by willing it. Trust me, its in my sig. Re: Construction loan with 88% LVR 15Apr 29, 2021 4:38 pm Noname They've asked already. Banks change credit policy all the time. If this was a H&L package that was assessed at the same time, but there was a delay on the construction portion due to titles or something, chances are they'd be flexible because of the credit policy that was used to underwrite the lot. But the OP bought land, sat on it, then went for a second loan a year later. Credit policy has changed. Bank doesn't care if you make a loss on LMI when you move. Its there to protect them from your potential risk. As a lender myself, I strongly recommended when you purchase a piece of land and has an intension to build in 12 months, at the same time, the bank lender can submit for land loan for approval and a preapproval for build, you can provide the bank an estimate (your budget) for the build loan, this will remove the stress from you. Generally, if your financial position is the same or better, you will have better chance as they previously conditionally approved your loan. Re: Construction loan with 88% LVR 16Apr 29, 2021 4:50 pm Flamingo Noname They've asked already. Banks change credit policy all the time. If this was a H&L package that was assessed at the same time, but there was a delay on the construction portion due to titles or something, chances are they'd be flexible because of the credit policy that was used to underwrite the lot. But the OP bought land, sat on it, then went for a second loan a year later. Credit policy has changed. Bank doesn't care if you make a loss on LMI when you move. Its there to protect them from your potential risk. As a lender myself, I strongly recommended when you purchase a piece of land and has an intension to build in 12 months, at the same time, the bank lender can submit for land loan for approval and a preapproval for build, you can provide the bank an estimate (your budget) for the build loan, this will remove the stress from you. Generally, if your financial position is the same or better, you will have better chance as they previously conditionally approved your loan. coincidentally this is exactly what i did. No dramas. build your own H&L package and get it assessed up front. Dark matter scientist, can breathe underwater, mind reader and can freeze matter just by willing it. Trust me, its in my sig. Re: Construction loan with 88% LVR 17Apr 29, 2021 8:44 pm Flamingo Noname They've asked already. Banks change credit policy all the time. If this was a H&L package that was assessed at the same time, but there was a delay on the construction portion due to titles or something, chances are they'd be flexible because of the credit policy that was used to underwrite the lot. But the OP bought land, sat on it, then went for a second loan a year later. Credit policy has changed. Bank doesn't care if you make a loss on LMI when you move. Its there to protect them from your potential risk. As a lender myself, I strongly recommended when you purchase a piece of land and has an intension to build in 12 months, at the same time, the bank lender can submit for land loan for approval and a preapproval for build, you can provide the bank an estimate (your budget) for the build loan, this will remove the stress from you. Generally, if your financial position is the same or better, you will have better chance as they previously conditionally approved your loan. My broker mentioned that we got a pre approval from NAB when I buy the land but now as it's past 6 month the pre-approval is expired and we need to go for the approval again. What have changed in mean time is the build cost. I got the pre-approval for 460 but now it's 560. Will that have an impact ?? Can I speak to NAB directly to check what's the situation is ? Re: Construction loan with 88% LVR 18Apr 29, 2021 8:47 pm Noname They've asked already. Banks change credit policy all the time. If this was a H&L package that was assessed at the same time, but there was a delay on the construction portion due to titles or something, chances are they'd be flexible because of the credit policy that was used to underwrite the lot. But the OP bought land, sat on it, then went for a second loan a year later. Credit policy has changed. Bank doesn't care if you make a loss on LMI when you move. Its there to protect them from your potential risk. Will this be a situation even if I had a pre-approval for construction when I purchased the land ? I got an pre approval last year when I purchased the land but waited to save some deposit and now starting the construction but my broker mentioned we have to get pre-approval again as it's more than - month. I took cautious steps to get pre approval and my land value appreciated but still NAB credit system rejects my application. Re: Construction loan with 88% LVR 19Apr 29, 2021 8:58 pm Karthik_K Flamingo Noname They've asked already. Banks change credit policy all the time. If this was a H&L package that was assessed at the same time, but there was a delay on the construction portion due to titles or something, chances are they'd be flexible because of the credit policy that was used to underwrite the lot. But the OP bought land, sat on it, then went for a second loan a year later. Credit policy has changed. Bank doesn't care if you make a loss on LMI when you move. Its there to protect them from your potential risk. As a lender myself, I strongly recommended when you purchase a piece of land and has an intension to build in 12 months, at the same time, the bank lender can submit for land loan for approval and a preapproval for build, you can provide the bank an estimate (your budget) for the build loan, this will remove the stress from you. Generally, if your financial position is the same or better, you will have better chance as they previously conditionally approved your loan. My broker mentioned that we got a pre approval from NAB when I buy the land but now as it's past 6 month the pre-approval is expired and we need to go for the approval again. What have changed in mean time is the build cost. I got the pre-approval for 460 but now it's 560. Will that have an impact ?? Can I speak to NAB directly to check what's the situation is ? Hi, you can ask your broker's advice. I don't know your situation in details. so you are asking for more lending? when you say lvr 88%, does it include your LMI or LMI on top of it? Re: Construction loan with 88% LVR 20Apr 30, 2021 12:06 am It's possible that even though you can service the loan, you may not service at the stressed rate. The stressed rate is a "shadow" interest rate you get assesd against to simulate a scenario where interest rates have grown exponentially. This is usually in the vicinity of 2-3% higher than the rate you're applying for. 100k more lending is not insignificant and I imagine that your DI ratio isn't great if after a year you've not been in a position to save a decent stack of cheddar to add to your purchase to offset the costs further. if you're borrowing at lvrs higher than 80%, your risk profile is increased. Investors and high lvr borrowers are usually the first to feel tighter credit policies when banks change them. In anycase. Move on, get a different lender. Considder non bank lenders and then shop around when your bud is complete for better rates. Dark matter scientist, can breathe underwater, mind reader and can freeze matter just by willing it. Trust me, its in my sig. Hi there, I hope someone can give me some insight into a (very lucky) situation I'm dealing with. My Mum was gifted property by my grandfather after he passed. 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