Browse Forums Home Finance 1 Aug 30, 2010 3:13 pm Hello - I just received a call from my loan adviser who has just advised the following - The banks have changed a few policies over the last few months. Of which one of them is the max loan size at most lenders is now $750k in total if you want to borrow 95% of the value of the property. Other wise, to go over this loan size they will want a 10% deposit or max lend of 90% over the value. Has anyone come across this yet??? THE LIGHT OF MY LIFE IS 495 SQM OF BEACH SAND AND WEEDS! http://missvintageshouseofpain.blogspot.com/ Re: Advice Wanted 2Aug 30, 2010 5:55 pm I don't think that will affect too many people. How many people have one loan over $750K? I'm assuming you mean one loan not total loans. Even total loans. I wouldn't be able to sleep at night with a 95% LVR. Re: Advice Wanted 3Aug 30, 2010 6:13 pm travelbug I don't think that will affect too many people. How many people have one loan over $750K? I'm assuming you mean one loan not total loans. Even total loans. I wouldn't be able to sleep at night with a 95% LVR. Hi Travel Bug - no this is the total of one house. So I already paid a deposit when I got the loan for my block - I now need to pay another deposit for the total of my block and house just for my house loan. Its almost like doubling up and will add about quite a bit to my new minimum deposit. This has only come in recently so im not sure exactly how its going to work. THE LIGHT OF MY LIFE IS 495 SQM OF BEACH SAND AND WEEDS! http://missvintageshouseofpain.blogspot.com/ Re: Advice Wanted 5Aug 30, 2010 9:15 pm We weren't allowed to go over 90% with our lender and we have had mortgages with them for nearly 10 years and the past two years we had been paying double on the block, but they still wouldn't let us go over that amount. I'm really surprised that there are still lenders out there lending over 95% no matter what the costs. The mortgage insurance on a loan that high, with a 95% lend would be massive! Re: Advice Wanted 6Aug 30, 2010 11:35 pm I Dont think I'm explaining myself very clearly, I have already paid a 10% deposit on the block when we brought it but now we are getting finance for the house itself they want 10% of the total house and block again so just say I origionally paid $100,000 for the block 10% deposit is $10,000. Now I want to put a $250,000 house on it I have to pay 10% on $350,000 (total price of house and land meaning instead of $25,000 deposit I have to pay $35,000 meaning the total deposit I have paid is $45,000. So it's actually alot higher than 10%. THE LIGHT OF MY LIFE IS 495 SQM OF BEACH SAND AND WEEDS! http://missvintageshouseofpain.blogspot.com/ Re: Advice Wanted 7Aug 31, 2010 5:34 am Each loan is still 10%, though... viewtopic.php?f=31&t=37229 - our Iris 4! Re: Advice Wanted 9Aug 31, 2010 7:52 am Alex88 Each loan is still 10%, though... But she's not paying 10% of each loan. She's paying 10% on the first and then another 10% of the first and second combined. That doesn't sound right unless they are no longer doing 90% loans. I'd ask what the maximum % is. I don't know how house/land finance works but I'd be chasing the bank about it. Maybe they "forgot" the 10% you've already paid. Re: Advice Wanted 10Aug 31, 2010 9:31 am They should be looking at the equity position. If you are asking to borrow 90% of the value they have a point. However if you are asking to pay the minimum deposit you need to then this is different. Using your example if you are after borrowing 90% of the final completed amount for refinancing then this would require a deposit of $35,000. However this deposit does not need to be cash, some banks allow you to use equity in the deposit, as you already have $10,000 in equity in the land you may be able to use this and you therefore only need to pay $25,000 in cash. Another thing that may make things even better is your land may have gone up in value by now (depending how long ago you bought it.) say it has gone up 25% it now may be worth $125,000, therefore your final property may be work $375,000. As you're loan will only need to be $90,000 (original loan for land) plus $225,000 (loan for construction) totaling $315,000 you will have $60,000 in equity which means you may only need to borrow 84% (315/375) thus saving on mortgage insurance and out of pocket cash. View our blog at: http://room4acubby.blogspot.com/ Re: Advice Wanted 11Aug 31, 2010 11:14 am MissVintage that seems to be contrary to what the usual process is. I have bought land too and have paid the 10% deposit on it. Now to build my house on it, I am taking out a construction loan for the price stated on my builders contract for the home. That will be treated as a separate loan and I will need to pay 10% of that loan value. At the point where the house is completed and the loan is paid out by the bank in full, you ask them (if they don't do it automatically) to combine the loans as a complete mortgage. They don't leave Construction Loans on their own usually, they convert them into mortgage loans. That conversion may have an administrative fee but that's all. I can only think that they are trying to combine the loans up front and asking you to stump up the new 10% deposit whereas they should be considering the 2nd loan separately and combine them later at the end of the build. Sorry to be so verbose. SK Build thread: viewtopic.php?f=31&t=34120 Handover 23 Dec 11 Squatting 21 Dec 11 Fixed 12 Oct 11 Plastered 31 Aug 2011 Framed 7 June 2011 Site Start 7 Feb 2011 Land Titled 18 Jan 2010 Land Deposit 25 Jun 2009 Re: Advice Wanted 12Aug 31, 2010 12:30 pm Ours wasn't done as two separate loans when we started building. We bought the block a couple of years ago, had a 20% deposit on that, then paid a bit extra on it over the couple of years. When it came time to building, the block loan was closed and a new loan opened, which the amount owing was the amount owing on the block, and the rest has been drawn down in progress payments. We had to have at least 10% of the whole loan amount as a deposit to have the whole loan. If you have paid the 10% deposit on the land then that will go towards your equity when it come to paying the 10% on the entire loan ($350k), but it will be treated as a new loan, which is probably why they are saying you need to pay 10% again. They won't work all that out until they have done their valuations and such. Re: Advice Wanted 13Aug 31, 2010 12:48 pm Rizzo Ours wasn't done as two separate loans when we started building. We bought the block a couple of years ago, had a 20% deposit onL that, then paid a bit extra on it over the couple of years. When it came time to building, the block loan was closed and a new loan opened, which the amount owing was the amount owing on the block, and the rest has been drawn down in progress payments. We had to have at least 10% of the whole loan amount as a deposit to have the whole loan. If you have paid the 10% deposit on the land then that will go towards your equity when it come to paying the 10% on the entire loan ($350k), but it will be treated as a new loan, which is probably why they are saying you need to pay 10% again. They won't work all that out until they have done their valuations and such. This is what's happening with my loan. We're talking out a land loan, and have to pay put deposit on that. Then when they begin building, the bank will pay out our land loan and take a new one at 90%. If we make extra payments on the land loan it will reduce the payout figure etc. Then we need to make a further contribution/deposit to bring the house and land loan to 90%, we are lucky however that we are putting the FHOG towards this so will have a relatively small contribution required. viewtopic.php?f=31&t=37229 - our Iris 4! Re: Advice Wanted 14Aug 31, 2010 12:52 pm Thanks guys I am a bit calmer today and not so panic'd at trying to find such a big deposit at the last minute. Lets just hope I have enough equity in the block to pay a nice large portion of it. Bring on signatures and and finanace approval and I will be a happy girl! THE LIGHT OF MY LIFE IS 495 SQM OF BEACH SAND AND WEEDS! http://missvintageshouseofpain.blogspot.com/ Versaloc is a mortarless besser block system that still needs a properly engineered footing. If you just do a 400x200 footing it will fail in time. At 17m long you need it… 1 15514 Thank you so much for the effort. We will use it to talk with builder. 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