Browse Forums Home Finance Re: Construction loan with 88% LVR 2Apr 28, 2021 8:52 pm 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 17Apr 29, 2021 8:44 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. 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 ![]() 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 ![]() ![]() ![]() 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. Can someone pls help with advice. My husband and I live in NSW and own a land in Tasmania. We were pre-approved to build a home( owner occupier). 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