Browse Forums Home Finance 1 Aug 13, 2012 2:17 pm Hi, Do you know if it's a common practice for lenders NOT to include the works outside of builders contract? Basically we talked to an advisor from a bank who said that we can get quotes from suppliers for our landscaping, driveway, flooring, electrical work, which is not from the builder to be included in the amount of the loan. However he has then moved on to different department and the person who deal with me now said that only the value in the builders contract that they can give us loan for. I have made my decision of what to include and exclude from the contract (doing lots of things post handover) on the assumption that these items can be included in the loan. I have the written advice from the banker, even with how they are going to process the payment to the vendors. So now that I've signed my contract without those things, and the bank said that I can't include those things. Just wondering if any of you know of any big lender who can include those items in the loan? Thank you Re: Loan for things outside builders contract 2Aug 13, 2012 2:32 pm Hi, We are in the same position. The bank will only lend what is included in the fixed price contract. If we subsequently don't get the builder to do something included in that price, the bank won't pay someone else (or us) the money. So basically, we have to find the money for everything we are doing ourselves outside after handover - not easy.... Building the Nautilus with Dale Alcock follow my thread: viewtopic.php?f=31&t=58854&p=909574#p909574 14/8/12 Pre-start! Re: Loan for things outside builders contract 3Aug 13, 2012 3:18 pm Our bank would only loan against what was in the contract. Re: Loan for things outside builders contract 4Aug 13, 2012 8:07 pm Maybe try getting it revalued at settlement time to see if there is equity built in that you could use for extras, or apply for a loan with a lender that has a $20,000 credit card at home loan rates which you can use instead. Re: Loan for things outside builders contract 5Aug 13, 2012 10:00 pm What we are really upset about is that the bank advisor has advised us that this can be done. And when the peson changed the policy changed too. We made our decisions based on this advice and now they're simply saying that it's not how they work. That is not just misleading but downright giving false information to prospective clients! Re: Loan for things outside builders contract 6Aug 13, 2012 10:27 pm My understanding of this is as others have indicated the bank will only lend against the builders contract prices. It seems they dont think that driveways and landscaping add value to a property??? The only way you can get a bank to lend you more is if you have more equity elsewhere. So if you are lucky enough to already own your first home you can borrow against that to pay for your non builder works. Clearly that is not an option for the majority of first time builders. If you get a valuation done after handover make sure you orgainse it yourself. You will need to use one of your banks approved valuers and pay yourself. If you get the bank to do the valuation and it goes the wrong way, guess what they will be looking for more cash or mortgage insurance. Building in Blackwood Park 2012/13 Land settled 8/8/12 Contract signed 6/11/12 Encumbrance approval 24/12/12 Development Approval 24/4/13 Slab Poured 8/7/13 Re: Loan for things outside builders contract 7Aug 13, 2012 10:33 pm When we built we just included a quote for floors with building contract & they allowed it no problems. I think our mortgage broker said they would for flooring, window treatments & air con Re: Loan for things outside builders contract 8Aug 13, 2012 10:58 pm LeanneR When we built we just included a quote for floors with building contract & they allowed it no problems. I think our mortgage broker said they would for flooring, window treatments & air con Yes in fairness Leanne you are right. We have been told the same. We can do internal things that would normally be expected to be part of a house ourselves. However fencing and the like is out. Building in Blackwood Park 2012/13 Land settled 8/8/12 Contract signed 6/11/12 Encumbrance approval 24/12/12 Development Approval 24/4/13 Slab Poured 8/7/13 Re: Loan for things outside builders contract 9Aug 14, 2012 10:55 pm Thanks everyone. I guess it would depend on the lender then. We will meet with the bank again tomorrow and see what they have to say about giving us wrong information. Re: Loan for things outside builders contract 10Aug 14, 2012 11:25 pm Good Luck............I did see someone with a great quote in their signature on this site tonight. "Banks........lend money to people who can prove that they dont need it" Unfortunately there is a little bit of truth to that these days. Building in Blackwood Park 2012/13 Land settled 8/8/12 Contract signed 6/11/12 Encumbrance approval 24/12/12 Development Approval 24/4/13 Slab Poured 8/7/13 Re: Loan for things outside builders contract 11Aug 15, 2012 9:27 pm LeanneR, Boults -may I know who your lender is? PM me if you don't mind. I don't think we are going anywhere with the current bank. They won't compensate us for anything regardless having given us false information. Won't even include flooring outside the builder contract. So now we're looking for other lenders. Definitely going to withdraw all our funds from there! Loan for things outside builders contract 12Aug 15, 2012 11:03 pm We went thru b ankwest and all our upgrades and changes had to be paid by us cash rather than included in bank loan The road to success is always under construction House completed April 2011 - slowly making it a home... Re: Loan for things outside builders contract 13Aug 16, 2012 12:19 am monz21 LeanneR, Boults -may I know who your lender is? PM me if you don't mind. I don't think we are going anywhere with the current bank. They won't compensate us for anything regardless having given us false information. Won't even include flooring outside the builder contract. So now we're looking for other lenders. Definitely going to withdraw all our funds from there! We are banking with the NAB. I dont have much choice as i have considerable business loans with them also............. Means I sort of have to be all in with one bank. It would be too hard to change the whole lot. Regardless of that they have been pretty clear from the start about how it will be structured. We dont have our contract ready to present to the bank yet but what they have stated is........... They will lend us 80% of the builders contract price. They will allow us to get quotes from third parties for internal components we may wish to do ourselves, eg flooring, window dressings but that is about it. The rest we need to pay for ourselves. Building in Blackwood Park 2012/13 Land settled 8/8/12 Contract signed 6/11/12 Encumbrance approval 24/12/12 Development Approval 24/4/13 Slab Poured 8/7/13 Re: Loan for things outside builders contract 14Aug 16, 2012 7:35 am We are with NAB too, and that's who we are having problems with. Even after written advice from their banker who now has moved on, they won't even do anything to correct their mistake. I guess it's different as you have considerable portfolio with them. Zarli - i spoke with bankwest online help and they said they would include flooring etc but they will pay to the supplier directly. Thisis getting very annoying, I guess dit would depend on your luck which advisor you get when you apply for your loan. Re: Loan for things outside builders contract 15Aug 16, 2012 7:35 am We are with NAB too, and that's who we are having problems with. Even after written advice from their banker who now has moved on, they won't even do anything to correct their mistake. I guess it's different as you have considerable portfolio with them. Zarli - i spoke with bankwest online help and they said they would include flooring etc but they will pay to the supplier directly. Thisis getting very annoying, I guess dit would depend on your luck which advisor you get when you apply for your loan. Re: Loan for things outside builders contract 16Aug 16, 2012 7:41 am Zarli We went thru b ankwest and all our upgrades and changes had to be paid by us cash rather than included in bank loan That's strange as we are with bankwest & included floor quote when we submitted building contract. No issues Re: Loan for things outside builders contract 17Aug 16, 2012 8:06 am You could tell the bank you are going to take it up with the banking ombudsman. Or just do it - if you have spent money based on the bank's written advice you have a good case for compensation. Re: Loan for things outside builders contract 18Aug 16, 2012 8:28 am Hi free will, we are planning to take it up to ombudsman, or whatever other avenues that are available. But now we need to Look for other lenders who can help us, or plan C, whatever that is :p Re: Loan for things outside builders contract 19Aug 16, 2012 8:40 am monz21 Hi free will, we are planning to take it up to ombudsman, or whatever other avenues that are available. But now we need to Look for other lenders who can help us, or plan C, whatever that is :p If you go to ombudsman you may be able to get the bank to do what they originally agreed to do Re: Loan for things outside builders contract 20Aug 16, 2012 3:19 pm they are still investigating.. haven't really reached a decision on what they can offer us to compensate for this wrong advice. In the meantime I think we'll need to shop around again. If the result of the decision is not satisfactory then we'll take it to the ombudsman. So.. cross fingers now.. 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 You talk about deletions, are they variations or PS and PC adjustments? pleas list them 1 16571 Depends what you're current inclusions are, but we're not including wardrobes and will just use second hand ones until we can save later on to get them built. Also have a… 3 11648 |