Browse Forums Home Finance 1 Nov 19, 2010 4:38 pm Hi everyone, I am seeking some guidance from the knowledgeable participants here. My situation is as following:- I bought a block of land in Craigieburn, Vic in Jan 2010 for $170,000 and it got released in Sept, 2010. I paid 10% deposit and got 90% land loan through Bankwest through mortgage broker. In early Sept, 2010 i finalized my Builder and got the building contract of $175,000 on which i have paid 5% deposit while signing the Building contract. After the land got settled, The builder got the building permit and plans approved through the council. Then my mortgage broker applied for a construction loan with Bankwest. Bankwest got the valuation of my land as $207,000. They denied my application as the LVR is 95%. On further queries by my mortgage agent what he found out that Bankwest's LMI insurer QBE insurance didnt considered the new valuation of my land of $207K, they only considered the value of purchase which was $170K. So I am missing out on the land appreciation of $37K which would have helped me to bring down the LVR. The mortgage broker than applied to Westpac bank (for full home loan) as they use Genworth for LMI and they considered the latest valuation rather than the purchase price. As per Westpac my borrowing capacity is only 330K (full homeloan) which i am still ok with it but its in processing since last 2 weeks and i havent got any update yet from the broker My broker says that instead of wasting more time we should go to another lender. The questions i have are:- 1) Should i keep my land loan with Bankwest and only shop around for construction loan or should I go for full loan which will mean refinancing my land loan? 3)With the above given figures and increased valuation of land i will be borrowing around 85% LVR, so which lenders are good in their valuations where they considers appreciated value of the land 2)I dont understand whats wrong with my application, i have done my part by paying 10% deposit on land and 5% deposit on my construction contract 3)I am on a package of $60K and shout get around 8K to 10K in overtime per annum, Although i recently joined my current job and i have 1 month left for my probabtion to finish, I am single with no other financial debts or commitments. 4)Can anyone give me a bit of guidance as to what should i do to see my house getting built. 5)Its been really stressful for me since past few days as I am not getting any clear idea from my agent as to whats gonna happen with my home loan application Any guidance is really appreciated Thanks, James Smith Re: My Home loan Predicament 2Nov 19, 2010 4:49 pm I know next to nothing about home loans, which is why we paid a broker. Our loan was a bit involved and our broker handled it beautifully, I would consult one and see what they come up with My building thread : viewtopic.php?f=31&t=36059 Paid initial deposit 24/7/10 Tender appointment 20/8/2010 Flooring and tile appointment 25/9/10 Colour and Electrical appointment 13/9/10 December site start delayed Site start (YAY!) 17/1/11 Slab pour 1/2/2011 Re: My Home loan Predicament 3Nov 19, 2010 4:54 pm Ok first things - you cannot split the debts between two different lenders. Only one lender can be the primary and any Bank will want to be No.1 - not No.2!! The next issue is that you are still within a probation period of work and trying to borrow with Mortgage Insurance involved. MI companies dislike probation periods and any changes in your recent employment / residential history. Also most MI companies will not include your overtime payts unless it is written into your job contract and you can prove it. There are special circumstances where overtime can be used as a norm but these may have changed since I was a lender. I would strongly urge not going elsewhere as the other big yuck for any MI company is someone who has numerous enquiries on his CRAA. To them it flags either desperation or that you are being declined at each other institute - which then in turn scares them. Your Broker needs to earn his wage. Tell him to chase up the approval or you will escalate the matter to his superior. Failing that you can call the Westpac Mortgage Centre (used to be 132588) and ask for the Broker section - but again this is what you are engaging a Broker to do (and am not sure whether TMC will discuss it with you?) Good luck. Some things are worth waiting for. Re: My Home loan Predicament 4Nov 19, 2010 5:09 pm Thanks for your replies building1 and kyton Kyton - I can wait for 1 more month to get my probation period over, even if the lenders dont consider my overtime than with my current circumstances i believe I am able to afford loan of upto $350K With the queries on CRAA, how much do u think I have to wait before applying somewhere else (if at all i have to go on that path) My agent is trying his best to followup but no luck yet Re: My Home loan Predicament 5Nov 19, 2010 5:12 pm From memory enquiries stay on your CRAA for 5yrs so doesn't matter if you wait a month all the previous enquiries will still be there. It is just hard because whenever MI is involved it is them that has the final say, not your lender. So if they get cold feet then the Bank will be unable to assist you (unless you can come up with 20% deposit). Again be proactive - chase and hassle your Broker until you have an answer!! They are being paid to do a job - make them do it. If they don't answer / return your calls - go above their heads. Some things are worth waiting for. Re: My Home loan Predicament 6Nov 20, 2010 8:47 pm I would try with a different lender. Some banks are ok with having two credit enquiries, so long as you have a valid explanation for it (which you do). So long as you don't have declines, the banks are ok with having a few credit hits. I do agree that it is the mortgage insurers that have the issue with multiple credit hits. By refinancing, you should be able to have the land valued at its current value, which means a larger opportunity for you to get a loan. The majority of lenders don't do 95% loans, let alone for construction, so this could get you out of this spot. Get your broker to do two things: 1) Ask them to suggest to you a lender/s that has in-house lenders mortgage insurance, or the ability to authorise the mortgage insurer to proceed. These lenders will look a little outside the square and if the deal looks good to them, the mortgage insurer won't have a problem. 2) Ask them to suggest a lender that services the proposed debt at the actual payments. some lenders add a buffer to the current interest rate, so some lenders will have a lower borrowing capacity for you than other lenders. I guess if the broker is stumped by either of those questions, find a new broker. these are pretty easy questions for a broker to answer. Land at Chermside At tender stage Re: My Home loan Predicament 7Nov 27, 2010 8:20 am I just got the copy of my credit file and it has 4 consumer credit enquiries on it. Does that mean that i now have a bad credit score? Are there any lenders who dont take credit score in to consideration? Re: My Home loan Predicament 8Nov 27, 2010 8:47 am I'm sure they all would take your credit rating into account. The more information they have, the better it will be for you. If it were me, I'd write a letter to the lender explaining the last 4 checks on your credit rating. I'd avoid going to yet again another lender. I think you just need a good Broker. I'm in NSW and have a great Broker, PM me if you want the details. Everything's done by mail, email & phone now so it doesn't matter if you're in different states. Building an Eden Brae Saville 27 http://karry327.blogspot.com/ Building thread https://forum.homeone.com.au/viewtopic.php?f=31&t=44247 Re: My Home loan Predicament 9Nov 27, 2010 2:40 pm Some of the lenders are wary of those who've had a few credit hits lately, particularly for loans at high LVRs. Yep, there are a few lenders that don't use credit scoring. I recently had a client who had 20 credit enquiries in the past 4 years, some credit requests were taken up but most weren't. A short essay from me was enough to get the loan over the line. so with only a few hits I don't see it as being as issue for you. Land at Chermside At tender stage Re: My Home loan Predicament 10Nov 28, 2010 11:18 am zozo Some of the lenders are wary of those who've had a few credit hits lately, particularly for loans at high LVRs. Yep, there are a few lenders that don't use credit scoring. I recently had a client who had 20 credit enquiries in the past 4 years, some credit requests were taken up but most weren't. A short essay from me was enough to get the loan over the line. so with only a few hits I don't see it as being as issue for you. I hope you are right Zozo, First of all i need a good broker who can work with my circumstances as the previous broker screwed my simple loan application to a complicated loan application now. Than hopefully a little essay from him might work for me as well. Re: My Home loan Predicament 11Nov 29, 2010 8:33 am Hi James, Have you considered refinancing the whole lot through a new lender. Make to most of the better LVR with the latest land valuation. Get a letter to explain the hits on your credit ratings and then maybe apply for an Interest Only loan. This with greatly reduce your loan repayments and make you assessment to repay much easier. A combo of high LVR and percentage of disposable income committed to mortgage is what really freaks the MIs. Once the house is completed and you have moved in you can get a new valuation and refinance to a principle and interest loan. By then you LVR should be 80% or better, it won't be a construction loan and your employment history will be good - banks should be lining up to lend to you. They will tell you its hard to get IO loans for construction but a good broker can get it done. Building an Eden Brae Saville 27 http://karry327.blogspot.com/ Building thread https://forum.homeone.com.au/viewtopic.php?f=31&t=44247 Re: My Home loan Predicament 12Dec 02, 2010 7:10 am karry327 Hi James, Have you considered refinancing the whole lot through a new lender. Make to most of the better LVR with the latest land valuation. Get a letter to explain the hits on your credit ratings and then maybe apply for an Interest Only loan. This with greatly reduce your loan repayments and make you assessment to repay much easier. A combo of high LVR and percentage of disposable income committed to mortgage is what really freaks the MIs. Once the house is completed and you have moved in you can get a new valuation and refinance to a principle and interest loan. By then you LVR should be 80% or better, it won't be a construction loan and your employment history will be good - banks should be lining up to lend to you. They will tell you its hard to get IO loans for construction but a good broker can get it done. Hi Karry, The latest twist in the story is not many lenders are keen on refinancing my land loan as its been only 2 months old. What i have heard is that many lenders have a policy to only refinance if its more than a year old. Seems like the last nail in my coffin........can it get better than this. I never thought buying my first home's dream would turn out to be a nightmare. I am totally clueless with this whole situation Re: My Home loan Predicament 13Dec 02, 2010 3:17 pm Hi James, I posted first and my husband responded under same log in last, so sorry if we doubled up on a few things. Try having a chat to Kevin - he's really switched on and will able to answer all your questions and get things sorted for you. Let us know how you go Building an Eden Brae Saville 27 http://karry327.blogspot.com/ Building thread https://forum.homeone.com.au/viewtopic.php?f=31&t=44247 Re: My Home loan Predicament 14Dec 16, 2010 8:14 pm Quote: Then my mortgage broker applied for a construction loan with Bankwest. Bankwest got the valuation of my land as $207,000. They denied my application as the LVR is 95%. Why would they deny your application because your LVR is 95%? Re: My Home loan Predicament 15Dec 16, 2010 8:28 pm 95% would require mortgage insurance I believe Deemaree Kyndylan Capers: viewtopic.php?f=36&t=46852 My blog: http://www.sufficientlysufficient.blogspot.com/ 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 19108 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 35328 How much are you ahead in payments compared to where the build is at? Have you fully drawn down the loan? 5 11932 |