Browse Forums Home Finance 1 Jan 21, 2009 7:55 pm Hi all,
Is anyone here aware of Westpac and the options they have during construction? Example.... We are looking at $250k fixed contract for construction BUT The construction portion doesnt include HSTP, AIRCON, FLOORING, SHEDS, FINISHING TOUCHES, etc, etc. So they are a cost over the fixed contract price from the builder, does anybody know if those costs can be factored into the construction loan. Thanks Westpac construction loans 2Jan 22, 2009 7:57 am Sometimes with construction loans it is difficult to get the banks inflexible systems to work with the real world realities of construction.
My advice would be to get the builder to include this in their construction quote and the builder can just pay for them from that extra money. This makes it simple for the bank. Doing it as a separate cost to the cost of construction simply doesn't work with the banks construction drawdown systems! Keep it simple and everything will be fine. Fight the way the banks computer systems work and you'll have nothing but headaches. Just to let you know a Shed can usually be done as a separate quote and provided along with the building contract, however the others are just too small. JB Re: Westpac construction loans?? Help REQ. 3Jan 22, 2009 8:25 am Quote: My advice would be to get the builder to include this in their construction quote and the builder can just pay for them from that extra money. This makes it simple for the bank. But, would this not then mean you have to do aircon, flooring etc through the builder when it may be cheaper to do it through someone else? I know nothing about Westpac's construction loans but our credit union basically let us set a figure (obviously subject to our ability to service repayments) which included known costs ie the land contract, the house contract, (it was a house/land package), anticipated 20,000 for variations at selections, estimated 12,000 for aircon, being done separately to builder and 10,000 in reserve. We had to sign a statement that all monies were to be spent on permanant fixtures to the property - for example we used some for roller shutters - and then just take each invoice, be it from the builder or separate companies, into the credit union to draw down funds. Fairly flexible system, I think Re: Westpac construction loans?? Help REQ. 4Jan 22, 2009 10:16 am Helyn Quote: My advice would be to get the builder to include this in their construction quote and the builder can just pay for them from that extra money. This makes it simple for the bank. But, would this not then mean you have to do aircon, flooring etc through the builder when it may be cheaper to do it through someone else? I know nothing about Westpac's construction loans but our credit union basically let us set a figure (obviously subject to our ability to service repayments) which included known costs ie the land contract, the house contract, (it was a house/land package), anticipated 20,000 for variations at selections, estimated 12,000 for aircon, being done separately to builder and 10,000 in reserve. We had to sign a statement that all monies were to be spent on permanant fixtures to the property - for example we used some for roller shutters - and then just take each invoice, be it from the builder or separate companies, into the credit union to draw down funds. Fairly flexible system, I think Most banks will allow you to work like this when you are borrowing less than 80% of the land value plus cost of construction. Very few allow it when borrowing more than 80%. Re: Westpac construction loans?? Help REQ. 5Jan 22, 2009 1:36 pm You will either need to provide Westpac with quotes from other companies whom you are getting these things from or a quote all inclusion from the builder. They will then value the property as if it is constructed with all these items included.
Basically Westpac will normally lend 80% of the land value + contract amount for home. Unless the valuation comes in higher or lower then these amounts - ie if the land has decreased in value they will lend 80% of the lower value or alternatively if the contract amount is greater then the final valuation then they will only ever lend on the lesser amount. Some things are worth waiting for. Re: Westpac construction loans?? Help REQ. 6Jan 22, 2009 6:24 pm Quote: Most banks will allow you to work like this when you are borrowing less than 80% of the land value plus cost of construction. Very few allow it when borrowing more than 80%. We borrowed nearly all of the money for ours but situation perhaps a bit different - the credit union had our morgage for previous house although it was almost paid off, at their suggestion we redrew on that mortgage for the land contract, not sure why now and then drew up another mortage for the house contract when construction started, I think by doing it this way they exempted us from paying LMI. When we sold our previous house we paid those funds onto new morgage. bridging loan, using equity to build new home 7Jan 23, 2009 12:41 am Helyn We borrowed nearly all of the money for ours but situation perhaps a bit different - the credit union had our morgage for previous house although it was almost paid off, at their suggestion we redrew on that mortgage for the land contract, not sure why now and then drew up another mortage for the house contract when construction started, I think by doing it this way they exempted us from paying LMI. When we sold our previous house we paid those funds onto new morgage. oh the joys of having so much equity that lets you do magic. So let me see , how we can sum that up? Equity release followed by security substitution. Very low cost way of doing a bridge, you should thank your lender. DIY, Home Maintenance & Repair That laser level looks lovely! We bought one for less than a quarter of that price off eBay. It worked really well for us and it's still going now, five years later. After… 1 16715 Hi, My home construction is complete, and the handover is scheduled next week. However the construction has been delayed and I have raised this to the builder. The… 0 5330 The fastest thing a builder will do is bank your cheque, those systems work perfectly with lightning speed, everything else is slow burn. Just the way it is. 1 8709 |