Browse Forums Home Finance 1 May 08, 2009 11:21 am Hi Thlo and everyone I went to speak to my broker the other night about finally going for a loan for our land and building. Our land is due to settle in Aug/Sep 09, but we need a loan so that we can sign our building contract before 30 June 09. We already have a 20% so we don't have to pay for LMI. We have put an application in for CBA Proffessional package. Anyways, I thought that we would get a land loan for when the land settles, and another loan for the construction of the house. Then once we get handover, the bank will consolidate the two loans into one loan. But I was told by my broker that it cant be done. Does anyone know, has anyone had this before? I was pretty sure that people have done this before. My broker thinks its better to have to loans, than one. So my question is: is it better to have to deal with two loans for 30 years, or to consolidate the two loans into one? Also, my broker said if we have one loan, then we wont be able to fix a portion of the loan, we either fix the whole amount, no nothing at all. I thought you were able to decide how much of your loan you want to fix if you decide to fix it?! I have a feeling my broker is either telling me fibs, or she doesnt really know the game that well . Thanks all Idiots are fun, that's why there is one in every village! - Dr. House - Re: Thlo, need your advice on land & building loans 2May 08, 2009 11:24 am I dont know the answer, but we are doing the same as you, a land loan, and a construction loan through CBA also. Our broker said after we get our construction loan (our land settles in August too), we'll just combine them into the one loan. Re: Thlo, need your advice on land & building loans 3May 08, 2009 11:36 am We are going through CBA with the MAV package, when we applied we applied for one $$ amount. However our land has already settled and we have a loan in place for just that. Once unconditional approval comes through for the construction, the construction loan with merge with the land loan to be all ONE loan. I know for a fact we can choose to fix some of the loan and leave the rest as variable, however I'm not sure if the MAV package and the professional package are able to do the same things. Actually.. I've never heard of the professional package and it's not on CBA's website.. Building with PD - Regent 23 Cascades on Clyde Estate HomeOne Building Thread - PCI Completed - 28th August. Handover - 11th September. Re: Thlo, need your advice on land & building loans 4May 08, 2009 11:49 am Thanks guys. aaron4erin, wow we are pretty much in the same boat!! Where abouts are you building? erinleigh, now that you've mentioned the MAV, i think that's the loan we are going for. I'm pretty sure its called a professional package unoffically? Ok so from what I gather, my broker doesnt really seem to know what she's talking about. Huh. Did you guys chose to have the two loans consolidated into one? Was there a reason why you guys decided to do this? I just thought it would be easier to manage one loan, rather than having two loans to manage. Idiots are fun, that's why there is one in every village! - Dr. House - Re: Thlo, need your advice on land & building loans 5May 08, 2009 12:00 pm wonderland Thanks guys. aaron4erin, wow we are pretty much in the same boat!! Where abouts are you building? erinleigh, now that you've mentioned the MAV, i think that's the loan we are going for. I'm pretty sure its called a professional package unoffically? Ok so from what I gather, my broker doesnt really seem to know what she's talking about. Huh. Did you guys chose to have the two loans consolidated into one? Was there a reason why you guys decided to do this? I just thought it would be easier to manage one loan, rather than having two loans to manage. Its called the Wealth package on the CBA website, but I think i may have heard people referring to it as the professional package too. So you could be right! We didn't really decide.. our Broker basically just did it that way. We did get a 'house and land package' through PD and the broker was linked in with PD. So it made sense to apply for a loan, get the land loan done before settlement and merge the construction in once thats been done. I don't think I really like the sound of 2 different loans.. I prefer to keep it simple and combined. I'd assume that since the land settlement is so far away, maybe thats why you can't have them combined? But i'd double check with CBA and see what they say. If you are having doubts about your broker now.. I'd almost be inclined to find someone else (Thlo seems good!) or to go directly to the bank. I haven't been happy with my Broker and I would have preferred to go directly to the bank or have chosen someone like Thlo. (Who has helped me with issues with my current Broker) Good luck! Building with PD - Regent 23 Cascades on Clyde Estate HomeOne Building Thread - PCI Completed - 28th August. Handover - 11th September. Re: Thlo, need your advice on land & building loans 6May 08, 2009 12:06 pm wonderland Thanks guys. aaron4erin, wow we are pretty much in the same boat!! Where abouts are you building? Ok so from what I gather, my broker doesnt really seem to know what she's talking about. Huh. Did you guys chose to have the two loans consolidated into one? Was there a reason why you guys decided to do this? I just thought it would be easier to manage one loan, rather than having two loans to manage. We didn't chose to do our finance this way, our broker suggested it. I think due to us needing the finance for the land, but settlement being a few months away, we didn't need the construction portion just yet. We have unconditional approval on our land loan, and a conditional on the construction. We're due to sign contracts with Henley next Thursday, then the banks will due the valuation, and hopefully give us the unconditional on that, then combine the two loan amounts. We're building in Mitchell's Run, Doreen. Cannot wait to start!! Thlo, land & building loan advice 7May 08, 2009 1:02 pm wonderland Hi Thlo and everyone I went to speak to my broker the other night about finally going for a loan for our land and building. Our land is due to settle in Aug/Sep 09, but we need a loan so that we can sign our building contract before 30 June 09. We already have a 20% so we don't have to pay for LMI. We have put an application in for CBA Proffessional package. Anyways, I thought that we would get a land loan for when the land settles, and another loan for the construction of the house. Then once we get handover, the bank will consolidate the two loans into one loan. But I was told by my broker that it cant be done. Does anyone know, has anyone had this before? I was pretty sure that people have done this before. My broker thinks its better to have to loans, than one. So my question is: is it better to have to deal with two loans for 30 years, or to consolidate the two loans into one? Also, my broker said if we have one loan, then we wont be able to fix a portion of the loan, we either fix the whole amount, no nothing at all. I thought you were able to decide how much of your loan you want to fix if you decide to fix it?! I have a feeling my broker is either telling me fibs, or she doesnt really know the game that well . Thanks all There are a few issues at play here. 1. CBA can allow you to do what you need either in one loan or two loans. You can merge the two loans later if you wish provided you don't choose a basic loan that can't be merged. Having two loans means you will have two separate repayments every week or fortnight etc. 2. Fixing part of the loan requires splitting the loan, which you can do later if you need to. Under the package you don't pay fees for each split. 3. On "I thought that we would get a land loan for when the land settles, and another loan for the construction of the house", regardless of one or two loans it is more practical to make the full application at once so the bank is fully aware of your plans (with indicative construction costs) and can issue a conditional approval seeing the full picture. If you only apply for the land now, you'll then have to explain the full structure when you go for construction later. BTW, as I post this reply I have been on hold to a lender's call centre going in perpetual call diversion loops not getting anywhere. I ended up in wrong departments a few times and staff put me back into right queue only to be off loaded into a wrong department again. I hung up an restared twice only to find the experience is repeated. When I read the frustration of borrowers at the forum, I understand fully. And I know some homeone members are still waiting for answers from me, I can only ask for their patience as we negotiate the lender call centres. There is definitely a reluctance to lend at the moment, even to well qualified applicants. You probably haven't heard this, one lender is requiring proof of genuine savings if you are applying for a purchase loan even if you only need a $50,000 mortgage on a $1,000,000 property. Re: Thlo, land & building loan advice 8May 08, 2009 4:17 pm thlo one lender is requiring proof of genuine savings if you are applying for a purchase loan even if you only need a $50,000 mortgage on a $1,000,000 property. Perhaps they should hand over keys to their car as collateral. Re: Thlo, need your advice on land & building loans 9May 09, 2009 7:38 pm What everyone else said but also... Quote: I thought that we would get a land loan for when the land settles, and another loan for the construction of the house. Then once we get handover, the bank will consolidate the two loans into one loan. But I was told by my broker that it cant be done. Does anyone know, has anyone had this before? This is what we are doing, with the CBA MAV package. We wanted to get the discounts offered at the time but weren't ready with the building contract so did it in two stages... Quote: is it better to have to deal with two loans for 30 years, or to consolidate the two loans into one? 2 sides of the argument here, personal choice really. Our CBA loans person said that two loans make it easier to, say, fix one and keep the other variable. (However, you can also split a single loan and nominate a percentage for fixed and a percentage for variable)...Her comment was that you can change an entire loan from variable to fixed and vice versa within 24 hours (say rates are going up and you want to lock in quickly) whereas splitting a loan can take upwards of 3 weeks to process and the fixed rate by the time you fix may be different than when you started if you get what i mean! Under the MAV package, you can have quite a number of loans going etc with no fees, so you can see how you go and if you feel like combining in the future, no problemo! Quote: Also, my broker said if we have one loan, then we wont be able to fix a portion of the loan, we either fix the whole amount, no nothing at all Not true...as above and as others have said! Quote: I have a feeling my broker is either telling me fibs, or she doesnt really know the game that well RUN! Re: Thlo, need your advice on land & building loans 10May 11, 2009 9:14 pm Thanks guys for all your advice!!! Idiots are fun, that's why there is one in every village! - Dr. House - Re: Thlo, land & building loan advice 11May 28, 2009 12:59 am d@n thlo one lender is requiring proof of genuine savings if you are applying for a purchase loan even if you only need a $50,000 mortgage on a $1,000,000 property. Perhaps they should hand over keys to their car as collateral. It's so funny the bank staff verbally advise this particular rule has now been repealed but when you ask for that policy change in writing (as per normal bank practice) somehow they can't put it in writing. Thank you so much for the effort. We will use it to talk with builder. 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