Browse Forums Home Finance Loan for things outside builders contract 41Oct 05, 2012 4:57 pm The issue here is that your loan will already be done, approved and contracts issued. To add in variations along the way means that the loan amount and possibly the LVR will also change which could in turn affect mortgage insurance. Remember things like piering don't add value to the building, just cost money. Some things are worth waiting for. Re: Loan for things outside builders contract 42Oct 08, 2012 3:31 pm monz21 And when the peson changed the policy changed too. The policy has never changed, construction loans are always based on the fixed price contract only. The person who told you this is what i call a "nodder"...meaning she/he would say yes to everything - just to win your business. you have 5 possible solution; 1. get the builder to add these cost into the contract and get them to project manage/sub contract it out @ a decent price...else the valuation will fall short and your back at square 1. 2. If you have a 2nd property- release some equity. 3. Go for a different lender with a more suitable product, lenders that will offer a "side" homeloan, or a secured personal loan at a very good rate for you to complete these upgrades. Rate: 6.25% Variable for 25 years. Or fixed for 3 years @ 5.70%, reverting to a 22 years loan later on. 4. Increase your LVR- but this can be a costly exercise... 5. After you finish building, wait 3-6 month and release some equity then ( IF the property goes up in value) Regards Michael Michael Chan | Australia wide Mortgage Broker Michael@ShapeHomeLoans.com.au | 1300 74 5626 | Fax: 02 8212 8909 http://www.ShapeHomeLoans.com.au Re: Loan for things outside builders contract 43Oct 11, 2012 8:36 pm monz21 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? I know your post was a little while ago now. But I think it depends on your lender and the home loan package you have selected. We too are building a Mac jones home and nominated the full loan amount we wanted and then put quotes in for all the extras (including water tanks, electricals and tiling to our outdoor ares plus the building contract) once completed we should have about $15000 put into our account to cover anything after handover. We have been using a broker but are going through the CBA. Thank you Re: Loan for things outside builders contract 44Oct 24, 2012 5:13 pm This is such a common issue by the sounds of it. Putting my bankers hat on for a mo There are two main issue: 1) control of funds and the 2) valuation 1) control - they are lending against something that is not there yet which scares them. So they want to really control the process. They do this by only releasing funds to the builder as per the contract schedule and as the building happens. Things outdside of the process just make it way too hard for them to manage in their process driven way. 2) valuations - lenders are relying on the valuers to tell them what the prop will be worth in the end, so once you start doing work yourself or supplying materials etc you are affecting the likley valuation as the valuer will in vast majority of cases only value as if complete as the sum of the land + construction contract. It would be awesome if some lenders were more flexible with quotes / upgrades / variations etc but as most of the posters here alluded to their equity in the 'deal' is slim so you can't expect them to be too "easy" on their seucrity side of the equation. Another issue for me / other experienced brokers and bankers is having the stregth to talk people out of certain things that we know will create headaches for them but then risk losing them as a client because Jonny banker from down the road say they can do this and that when I know they can't really. Re: Loan for things outside builders contract 45Oct 30, 2012 3:45 pm You will find most of the "big banks" have similar policies, generally they only lend for items outside the contract if you have equity in the property. I would be wary of arranging your own valuation after settlement as your bank may not find it satisfactory and will only want to conduct their own anyway (at your cost) so check with your bank first before arranging. On the upside if your build is only just commencing hopefully you have time to save a few dollars to pay for the extras (it will save you big time in the long run) Re: Loan for things outside builders contract 46Sep 26, 2013 10:58 am Hi all, Not sure if anyone is still looking for information on this but we have recently met with our current bank, ANZ, and we have been told that when building a new home (construction loan) if we have a 5% deposit (for customers who have held a loan or credit card with them for more than 6 months) or 10% deposit for new customers, that providing quotes are provided with Building Contract at the time of applying for the finance that they will lend you an additional 10% of the building contract price to spend on additional items for the home - these things included (but not limited to) blinds, flooring, landscaping, fencing, pools, etc. An example of this - Building Contract = $280,000. 10% Deposit = $28,000 or for existing customers 5% deposit = $14,000 Funds available for additional quotes = $28,000 We have found that this is more than enough to cover some additional things when putting all of our savings into the deposit! 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 19068 You talk about deletions, are they variations or PS and PC adjustments? pleas list them 1 16542 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 11596 |