Browse Forums Home Finance 1 Mar 11, 2009 9:44 pm My Father in law is building our house and essentially charging us an hourly rate and what ever the contractors / materials cost.
As the price will vary depending on which contractors are available at the time and how much we do ourselves it is difficult to draw up an accurate contract. Too little and we will be short at final payment, too much and he will be left with money which he has to account for ( i assume??) that we will be putting back onto our loan. (after we give him a nice bonus of course ) We own most of our land which leaves us with a small mortgage at the moment and we have enough cash to pay some of my mates (that are tradies) cash for bits and pieces. My question is what type of loan should we be going for? My personal banker says we might need to go for a owner builder type loan but it sounds a bit full on with the need for us to supply the bank quotes etc.. She was going to get another valuation on the land which may allow us to have the money paid straight to us and we pay everyone from it. Which sounds perfect but i didn't think that banks would do that. Unless it will just be progress payments like they would to the builder but it goes to us instead and we do the paying. Anyone been in a similar situation or know whats the best option? Re: What are our options? 2Mar 12, 2009 7:23 am Hi there. It sounds that you definately need an OB loan. The definition that you said about paying your father in law to build it and other tradies cash to do bits and pieces is the definition of an owner builder.
You need to to get a loan through a bank that is sympathetic, such as St Georges or BOQ. Otherwise if you have a good relationship with your exisiting bank they may lend to you, banks can do whatever they want it just comes down to risk and most can't be bothered taking the risk. The other option is if your father in law is a builder you could enter into a building contract with him and then you alleviate the problems of getting a loan, and any bank will do it. good luck, Re: What are our options? 3Mar 12, 2009 1:21 pm Thanks Hunts.
OK, so we better look at drawing up a contract on the weekend as i think this sounds like the easiest option at the moment unless the bank does decide its happy to lend straight to us. Unlikely i think. What are the standard stages for progress payments? Slab Frame Lock up Final payment is there one i'm missing? Re: What are our options? 4Mar 12, 2009 1:34 pm The best option to do is if you own most of your land then use this equity to borrow money to finance your build. Viridaina line of credit is great for this and you can hook up a cheque book to it.
Say for eg your land is worth 200K and you still own 20K then you have 180 of equity to which you can borrow $144K. Hopefully this will cover most of your build if not that is fine. Just use the money . Then when you hit lock up ask for an increase. By then the value of your land would have increase with a part house on it. Say if you sepnd 140 by then your house will have been worth around 200+140 = 340. Even if they bank values it at say 300 you can then have 240K to borrow at 80%. Standard uninsulated double brick has an R value of around 0.7. An insulated standard 90mm stud timber frame can have an R value of around 2.7. Even if you insulate a… 17 12069 Hi there, I'm a conplete newbie to this, but I'm looking to put a floor down in my 6x9m shed. It's currently sitting on a 100mm thick concrete perimeter (dirt floor… 0 6468 Howdy all. I am looking for feedback on what people would do to maximise and make an area as flat as possible. First, out the front of the house is a sloping hill, pretty… 0 20166 |