Browse Forums Home Finance 1 Mar 16, 2010 10:50 pm Hi there I was just wondering if anyone here can help by providing information I'm very confused about. We just got our building contract, basically it says that the building deposit can't exceed 6.5%, say it's $15k. then total progress payments is $230k. We are getting finance with anz bank. If we want to borrow only $210k instead of $230k, how do we go about it? we can't make an extra deposit to the builder directly as the max deposit we can make is only 6.5% of the contract price (the $15k is already max). Can we make a deposit to the bank?? Another question is - our loan for the land has just settled - should we combine the land loan and building loan into one or separately? Would there be any effect on the LMI? any help will be much appreciated Re: Question about deposit on building loan 2Mar 17, 2010 7:43 am I dont understand how LMI is calculated but the first problem seems easily solved - pay the builder the required deposit and then when the first progress payment is due, just draw down the portion you need and pay rest with your own money. Seems better to me to just pay minimum deposit and then do this - your own money is sitting in your account until you pay first progress payment, earning you interest in the meantime - if you pay it all as a deposit to the builder its earning you nothing Re: Question about deposit on building loan 3Mar 17, 2010 8:18 am The thing to remember is the deposit you pay to the builder and (if applicable) land only makes up a proportion of the deposit you provide overall in regards to your loan amount. For example our land and build deposits total somewhere in the vicinity of 40k, we've then added to that the FHOG which the bank will claim on our behalf following the base stage completion and they will then consider that part of our 'loan deposits'. Aside from this we have also decided to 'deposit' towards the loan another 10k or so in order to lower our loan amount down to the next lower bracket for LMI. (The percentage amount of LMI charged varies depending on the LVR percentage. Ie if your LVR is 84% the amount they charge as a percentage of your loan amount is smaller than someone with an LVR of 86%. Don't quote me on the percentages, just working back from memory of what our broker explained to us.) What will happen is that the bank will require we pay all our nominated 'deposit' amounts before they will release any funds, hence our first progress payment will be paid from the remainder of our 'deposit' amount, and then we'll draw on the loan for the rest of the progress payment amount. Hope that makes a bit of sense. But if you want a specific answer that looks into your specific situation I'd recommend you contact a broker or financial advisor. This is all new to us as well and our broker has been great in taking us through the process until we understood it. Our Build - Places Fairhaven 23+ - https://forum.homeone.com.au/viewtopic.php?f=31&t=28045 Our Landscaping - Belial's Backyard - https://forum.homeone.com.au/viewtopic.php?f=19&t=45375 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 18896 In NSW the maximum deposit for building work is 5% until the builder provides HBCF insurance 1 4813 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 35191 |