Browse Forums Home Finance 1 Jul 27, 2011 10:22 am Hoping to get some help from the experts: We have bought a house from a builder that is currently being built (expected settlement date is 15 October 2011). The contract is subject to finance with last date being today. We have already paid 5% deposit. Our lender has done it's valuation and is satisfied for now but they want to do a valuation again when the house is complete. For this reason they have just issued us a Conditional Approval (subject to valuation when complete). They won't give us unconditional approval unless they have re-valuated the house when it is complete. This is out of my comfort zone knowing I cannot backout from the contract if anything falls through with the valuation at last minute. Is this a normal practice for lenders? What are my options from here? Re: Not being unconditionally approved before house is compl 2Jul 27, 2011 4:07 pm Yep, this is normal practise for a lot of builders. There are a couple will issue an unconditional if completion is within a month or two. CBA may consider issuing an unconditional if the completion date is less than 90 days away but with your cooling off about to expire you won't get a new approval in before the deadline. The biggest issue with off the plan purchases is the valuation. Sometimes they are valued under the purchase price and you may have to foot additional costs to cover the shortfall. But if the val came in ok, then you shouldn't have a problem. is the loan requiring mortgage insurance? If not, you are pretty much fully approved now. Buying off the plan can be a gamble. But if you do have additional funds available if needed and you don't buy another house or obtain more credit since getting your conditional approval, you are usually pretty safe to think that all will be ok. Land at Chermside At tender stage Re: Not being unconditionally approved before house is compl 3Jul 27, 2011 6:33 pm Thanks Zozo - the loan does not require mortgage insurance as our LVR is 75%. Our mortgage broker did mention that even if the final valuation is $20,000 below the purchase price, we should be fine. If it's more than $20,000, then yes we'll have to come up with funds to pay the difference. We do not plan to apply for any more credit. Re: Not being unconditionally approved before house is compl 4Jul 28, 2011 2:18 pm Yes that's right at 75% lvr you have effectively a worst case scenario of a 20% margin for error ie a 95% loan. Certainly not ideal if it were to pass due to lmi cost but your margin for error is a fair bit. Your call at the end of the day as to whether it's an accetable risk. If your patio is going to be 35 sqm then that's going to need Council Approval. The fact that they previously approved your 25sqm patio will be irelevant 1 5510 I am in the same situation, would you be able to give some insights in to this? I am in SA 8 17061 My garage door has started playing up recently. Sometimes (and getting more frequent) when I press the button to open it, it wont. The motor is an ATA GD0-6V3. Red and… 0 2675 |