Browse Forums Home Finance 1 Jul 17, 2012 11:20 am Hi Everyone, I’m in some desperate need of someone telling me this is all going to work out in the end...I feel so stressed I might burst. The story so far.... First up my husband is a builder – so this is regarding an owner builder loan (I can see the dark cloud moving toward this thread already) We applied for a land and construction loan in September 2011 (St George) – both were approved in writing (approval in principle). (We didn’t want to purchase a block if the bank wasn’t going to give us finance to actually build on it). So we got that first before shopping for a block. We found a block and after the bank did the valuation we received formal approval in November. (Borrowed $80K) We submitted our plans to our local council in February (approval took 3 months) so we received our approved stamped plans in May. We then went back to our broker to submit our approved plans (required for construction loan approval) to find out that we needed to re-apply as our construction loan had lapsed. We had to submit new financials and currents BAS’s for the business and also my current pay slips (which showed an increase of $600 a month from the last time we appplied). My husbands business though did not the produce the same turnover ($50k less) and the bank then said this was not enough and couldn’t approval the loan. Some background information, the only debt we have is a car loan for about $7K which the broker informed the bank we would pay out subject to approval. We have one credit card (which we pay out to $0 each month) and no dependants. We have paid out about $10,000 of our own money to get to this stage (house design plans, council submission, legal fees etc.) The amount we are asking for is $163K. (The lender put 15% contingency on top which took it to $180K). We currently have a block of ground and all documentation to start building today yet no finance approval. Our broker is doing everything that he can to tackle our application with St George in another way and if that doesn't work try another lender. In the meantime though we can't do anything..... Has anyone experienced similar and lived to tell the tale? Surely you can't get stuck with a loan loan with no one to provide finance so you can actually build on it. Can you? (maybe I don't want to hear the answer to that....) Re: Our Construction Loan Nightmare 2Jul 17, 2012 11:37 am I'd be trying somewhere like http://www.intellichoice.com.au/owner-b ... nance.html who specialise in OB loans, we looked at these guys & they were great to deal with Best of luck...... havent started down that road ourselves yet but just wanted to research our options first Re: Our Construction Loan Nightmare 3Jul 17, 2012 1:00 pm Took us 6 months to sort out finance, and that's building with a large residential builder! Our major problem though was the banks wanted to under value us! By anything up to $22,000! We argued with the first bank for months and they agreed the validation was stupid but wouldn't do a new one! In the end another bank did the trick! Should have done that sooner! Try another bank, unless you prefer your current bank for some reason 2 Re: Our Construction Loan Nightmare 4Jul 18, 2012 2:00 pm Thanks for the comments so far Had a slight positive development today. Our broker asked to see our Income Calculation Worksheet from the assessor. Apparently alot of details entered in (by St George) were done incorrectly - they had our serviceability down at 1.22% (minimum with St George is 1.25%) when the broker re-calculated with the corrected data we sit at 1.75% - hopefully we may be able to go above the assessor to the team leader and get some results. So far pretty unimpressed with the dragon....a month to get to this stage and now we hear they worked up our numbers wrong!! Re: Our Construction Loan Nightmare 5Sep 18, 2012 9:52 am Well since my last post (18th July) we have continued to jump through hoops, supplying more information and assurances that we are good for our loan with every piece of information we supplied we were told "this is the last thing we need until we issue formal approval". We were told last week that "we feel you are too much of a risk". (Even though according to our broker (St George agree) we can service the loan AND agreed to funding the project and not getting our first drawn down until frames were complete and an inspection was made). Fair enough a bank knocks you back, it happens, although why this took 3 MONTHS + I have no idea!! Formal letter of complaint coming your way St George. We are also closing our 5 accounts with them!! Broker is lodging with Westpac this week.... apparently they have one of the best loan processing centres around... hope that's true. Re: Our Construction Loan Nightmare 6Sep 18, 2012 1:46 pm I really feel for you, the financial processes are such a nightmare and the banks don't realise the stress involved for the applicants. I hope you have better luck with Westpac than we did, even after being with Westpac for over 8 years. We are now no longer a Westpac customer. Fingers crossed you get your approval and that you get it in a more reasonable time. Re: Our Construction Loan Nightmare 7Sep 18, 2012 7:42 pm Probably not what you want to hear, but we just had a pretty bad experience with Westpac. It all turned out well in the end, but I felt like you during the process - I honestly didn't even want the house, I just wanted to give up. A process that should've taken a month ended up taking three, just to settle on the block of land. They were constantly undervaluing everything. We ended up having to put a lot more of our own money in than we planned. We went through a broker also, the loan processing centre lost our QBBG application form which lead to further delays, and stuffed up all our settlement figures so the day before settlement they were paying out $40,000 less than they were supposed to. But don't worry - it will work out in the end, ours did! Stelle 1st build: viewtopic.php?f=31&t=59376 *New*-2nd build: viewtopic.php?f=31&t=70324&p=1154282#p1154282 Re: Our Construction Loan Nightmare 8Sep 18, 2012 8:28 pm gonecountry Well since my last post (18th July) we have continued to jump through hoops, supplying more information and assurances that we are good for our loan with every piece of information we supplied we were told "this is the last thing we need until we issue formal approval". We were told last week that "we feel you are too much of a risk". (Even though according to our broker (St George agree) we can service the loan AND agreed to funding the project and not getting our first drawn down until frames were complete and an inspection was made). Fair enough a bank knocks you back, it happens, although why this took 3 MONTHS + I have no idea!! Formal letter of complaint coming your way St George. We are also closing our 5 accounts with them!! Broker is lodging with Westpac this week.... apparently they have one of the best loan processing centres around... hope that's true. Hi Sorry to say but Westpac owns & funds St George so both have similar credit policies and so I'd be wary about going down that route. They also talk to each other and when they see the St George credit enquiry on your credit file file they will put two and two together. Your credit file is not something to play with and lenders seeing multiple enquiries may decline from the outset due to too many hits on your file. I'd be more inclinded to find out exactly what the dragon has an issue with and try and mitigate their concerns. You either meet their policy or not.... Good luck Re: Our Construction Loan Nightmare 9Oct 02, 2012 8:26 am Just heard on Friday we received unconditional approval from Westpac! Can't believe what took St George 3 MONTHS took Westpac 9 days!! Sweet sweet relief 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 19097 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 35326 How much are you ahead in payments compared to where the build is at? Have you fully drawn down the loan? 5 11916 |