Something that has had me a bit puzzled for a while ...
Our bank (a big four), approved a large loan sum for us to begin our renovations - around the 250k mark.
They came and did an evaluation of our house pre-renovation. Considering that our existing home loan was close to nothing, they approved the (large) amount that we asked for without even asking officially what it was for - even though I would always mention that it was for a reno. We did not have to show plans, council approvals, a building contract or anything.
Is this normal for a renovation via (I guess what you could call) an equity loan ?
It even made me concerned to the point where I queried the lender why they did not want to see the contract. The response was that we had sufficient existing equity (based on the valuation of the pre-renovated house), we had the capacity to make the repayments and that they basically did not care what we spent the money on.
... and I thought banks were becoming more cautious and responsible with their lending !
Have others experienced the same with equity loans ?
Where does the bank's duty of care lie with respect to the lending of money ?