Browse Forums Home Finance 1 Aug 03, 2011 9:52 pm Hello people, long time lurker. Finally getting my hands dirty starting on a duplex subdivision. I received pre-approval for a construction loan from a bank last week. Currently finalising floor plans for both lots, before settling on a builder. The loan will naturally cover the construction, but I also want the loan to cover finishings such as tiling, paint, curtains, carpet, landscaping, air-con etc. The broker has said this is possible. I have been told the bank requires a written quote for each of the finishings, but most quotes I see are only valid for 30-60 days. How will the bank factor in the quotes to come up with the final loan amount? And will I definitely have to use those companies/quotes that I receive in the next 2 months, as opposed to getting new quotes after construction is complete? I imagine in this economy, the prices could go up/down pretty quickly in the year it will take for construction. Will the bank factor that in? How many companies will even give a fixed price quote for a paint job or air-con install that is more than a year away? All I can see them giving me is a rough estimate, more than anything remotely specific. I have asked the same question to the broker, but thought I'd also throw it up here. Appreciate any comments from people who got a loan to cover finishings. Thanks in advance. Ay Re: Written quotes for duplex construction loan - pre-approv 2Aug 08, 2011 6:07 pm Hi, The bank has only issued a pre-approval ( doesn't mean much im afraid) Also the builder has only given you a quote that's not set yet as well as you most likely be changing a lot of "specification" - also quite useless... The bank will only issue the final unconditional approval- once you have everything set with your builder - a fixed price building contract + council DA approval done. Some banks are happy to issue unconditional based on a building quote - but they would have a condition that the building quote does not change etc... You will need: 1. fixed price building contract 2. Da approval stamp of approval ( certification) 3. Bank's unconditional approval Depending what time frame your looking at- if your planning on building in 1 + years...then there's not much you can get from the builder or bank- most of their contract ends after 90 days....so really you can only apply for approval when your within 3 month away from signing with the builder or start of building. Regarding the "soft cost ( tiling, paint, curtains, carpet, landscaping, air-con ) they can be borrowed!! i do it 80% of the time!! there are 3 way; 1. Contract that part with the builder as well- so it be part of the set price contract - common and easiest way 2. If you want to contract out your self, because it MAY be cheaper- there are a few lenders that will offer to give you a $20,000 credit card at the same rate as your home loan. 3. Depending on your LVR; when construction is done a new valuation will be done- if it has some equity left you can top up the loan to the max LVR ( split loan is required) ---- this step can be used for any another property you may have. Lastly- the most important thing now is to decided; when you want to build? which bank and get a DA approval . Regards Michael Michael Chan | Australia wide Mortgage Broker Michael@ShapeHomeLoans.com.au | 1300 74 5626 | Fax: 02 8212 8909 http://www.ShapeHomeLoans.com.au 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 18897 The fastest thing a builder will do is bank your cheque, those systems work perfectly with lightning speed, everything else is slow burn. Just the way it is. 1 8702 Even if it's not being sub-divided and you want to keep it as Torrens title, you will still need to talk to a town planner or Council themselves, to see if they will allow… 1 11012 |