Browse Forums Home Finance 1 Feb 17, 2009 4:11 pm Hi guys,
Have had a land loan with Westpac for a bit over 2 years now and ready to construct, have chosen our builder and today just dropped all the info to our draftsperson to get drawings done for the building permit. I have already been to the bank to find out our borrowing capacity however don't have an official pre-approval in writing. Have a quote from our builder however this will increase with some changes we are going to make. At what point do I apply for the increase in our loan to cover the construction. I'm assuming this shouldn't be a big deal as we have had the land loan for over 2 years? Do I wait till I have a building contract signed? But to sign the building contract we pay the builder a 5% deposit which we were going to be using the FHOG? Help! Cheers, Bailey. Energy efficient custom built house - Moving In 3 Weeks Re: When to see the bank for construction loan? 2Feb 17, 2009 5:09 pm Bailey Hi guys, Have had a land loan with Westpac for a bit over 2 years now and ready to construct, have chosen our builder and today just dropped all the info to our draftsperson to get drawings done for the building permit. I have already been to the bank to find out our borrowing capacity however don't have an official pre-approval in writing. Have a quote from our builder however this will increase with some changes we are going to make. At what point do I apply for the increase in our loan to cover the construction. I'm assuming this shouldn't be a big deal as we have had the land loan for over 2 years? Do I wait till I have a building contract signed? But to sign the building contract we pay the builder a 5% deposit which we were going to be using the FHOG? Hi Bailey, You can apply for the construction loan when you have your fixed price tender. You don't have to have your building contract signed to get the conditional approval (in writing). As our seasoned builders here will tell you, First home Owners Grant is not paid until your first progress payment is processed. If you have to pay the 5% to the builder at the time of signing building contract and you don't have the 5%, that's going to be a problem as you can't apply for the Grant until you have an executed building contract. Maybe your lender can increase your land loan to give you the money you need for the 5% deposit. Re: When to see the bank for construction loan? 3Feb 21, 2009 9:54 pm Local banks, if they do construction loans, might be able to offer you a great rate. National Lenders are more likely to have construction programs, but the drawback is that they do not necessarily have their fingers on the pulse of the local Real estate market. But your first consideration should be construction lending experience. Even more than a mortgage loan, a construction loan is complicated. Avoid using any entity that provides you with a loan officer who doesn't have significant experience providing construction loans to consumers. Although some loan officers are salaried employees, most loan officers are salespeople who usually have one main goal in mind when helping you with your loan request, and that is the commission (also known as loan fee, points, or yield spread premium). The following questions allow you to quickly find out if your loan officer is experienced at construction loans and is not simply after your money. If the loan officer (sales person) can answer these questions with no problem then they have passed a pretty good litmus test: The biggest challenge will be if you take out a loan and then run out of money - you'll have an incomplete security and lenders do not like this so you can get stuck.… 2 19096 How much are you ahead in payments compared to where the build is at? Have you fully drawn down the loan? 5 11916 Hi, you've probably already resolved this, however, Commbank will probably pay the funds to you after you send evidence the work is done regardless the change in the quotes. 1 35321 |