Browse Forums Home Finance Re: Help with loan options 5Sep 19, 2011 11:54 am Hi mum2matt, Rizzo is correct in saying that it all relates to how much the loan is compared to the value of the property. One of the EASIEST ways to get around this is to see if your builder is willing to 'subcontract' to your carpet company etc. and then include this cost into the building contract. If your builder is willing to do this then it will make things a lot simpler. I have in the past sent a loan submission to a bank with a building contract PLUS quotes/contracts for other items and had approval given. The key is that whatever is going into the property needs to be provided upfront. So that it can be sent to the valuer and the property can be valued with ALL the information. You will most likely need to negotiate with your builder and with the sub contractor companies to arrange how payments will be made. ie. if your builder will front the funds to the subbies in lieu of the bank sending the builder funding OR if the subbies are comfortable to wait on payment AFTER they complete work and when the bank provides final draw down. The thing to keep in mind is that the bank wants a 'complete' house as security behind your loan. If they have a building contract minus flooring, yet receive a 'separate quote for flooring. Then this completes a house for them... It is good business sense to accept this etc... It is just a matter of WHICH lender you are using, HOW it gets put together when sent to them and WHAT terms are involved with regards to the quotes/building contract. Keep in mind that these things go to the valuer to be checked against what the market thinks it would be worth.. If the sub contractor quotes/costs are not 'inline' with the quality and costings of the total build contract the valuers may make note and this could hold things up. The bank wont front YOU the money to put these items into the property.. But generally speaking done the right way.. they will fund it through the builder. The builder has a BSA, and the builder has INSURANCE. This gives the bank recourse for issues that arise within the first few years of a new property. If you are doing the running around looking at 'banks' yourself. I might suggest chatting to a broker that could KNOW who to speak to for your situation already. You may find as well depending on which banks you are talking to or 'where' they are located. The lender in that particular branch may not see a lot of construction lending and in your circumstance some more specific knowledge could be beneficial. I hope this helps you out. Regards, Trent Davidson Property Finance Consultant Residential Lending LJ Hooker Finance Brisbane North Credit Representative Number: 387283 under Australian Credit Licence:380270 Re: Help with loan options 6Sep 19, 2011 9:13 pm Hi Trent, Thanks so much for your detailed post... a few good ideas which I will followup on with the builder. Thanks again for your help, much appreciated. We have got a broker onto the case who has done a lot of construction loans so hopefully we will be able to get around it all somehow. Cheers Fiona 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 19114 Hi there, I'm a conplete newbie to this, but I'm looking to put a floor down in my 6x9m shed. It's currently sitting on a 100mm thick concrete perimeter (dirt floor… 0 6468 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 35332 |