Browse Forums Home Finance Re: Valuations - how does it work? 21Mar 27, 2013 8:18 pm "Subject to finance" means that if you cannot get confirmed finance within a certain amount of time, you can withdraw from the contract without penalty. Deemaree Kyndylan Capers: viewtopic.php?f=36&t=46852 My blog: http://www.sufficientlysufficient.blogspot.com/ Re: Valuations - how does it work? 22Mar 27, 2013 11:55 pm ssjmark we've seen the broker and they did our borrowing power.. came back with more than enough.. however, not sure if pre approval would pass because we dont have the 5% as of this exact moment.. but will have it by the time the 5% deposit is due.. All the bank will do with the pre-approval is go on what you have now, and not what you might have by then. Even with a pre-approval, they generally last three months and are subject to conditions such as valuation, etc. As the land won't settle until mid next year, the pre-approval will have lapsed, and the price paid for the land now might not be the same as the lender valuation if the market drops which if you are at the minimum 5% deposit means that you would have to stump up more cash to complete the purchase. It's also advisable when building to have some spare savings set aside for the "extra" costs that always seem to rear up during the construction phase. Deemaree "Subject to finance" means that if you cannot get confirmed finance within a certain amount of time, you can withdraw from the contract without penalty. Usually with contracts such as this with settlement dates way in the future vendors are apprehensive about allowing a subject to finance clause. Can't hurt to ask though. Cheers Tom Re: Valuations - how does it work? 24Mar 28, 2013 1:07 pm Around 3-4% of the building cost would be a nice buffer. Re: Valuations - how does it work? 25Mar 28, 2013 1:09 pm ssjmark Thanks Tom. Appreciate the time taken to reply. How much extra should one set aside for the those unforseen extra? $10k? Do you have income protection? If you sign a contract and lose your job can you afford to meet the repayments of the loan required? Deemaree Kyndylan Capers: viewtopic.php?f=36&t=46852 My blog: http://www.sufficientlysufficient.blogspot.com/ Re: Valuations - how does it work? 27Mar 28, 2013 7:29 pm I won't recommend any in particular ( DH has been in banking for more than 25 years-I used to be) but suggest that you read and reread ALL the info before you sign. Then, read again! Deemaree Kyndylan Capers: viewtopic.php?f=36&t=46852 My blog: http://www.sufficientlysufficient.blogspot.com/ Re: Valuations - how does it work? 28Mar 28, 2013 7:47 pm For what it's worth, I wasn't willing to even look at buying until I had 20% put aside. Too much rides on valuation, which I find too worrying to tolerate. With only 5% deposit you are very much at the bank's mercy. Our personal estimate of a property's value is based on perceived value - seeing ourselves living in it. A bank only cares what they can offload it for if you default on your mortgage. Very different ways of thinking. HD Re: Valuations - how does it work? 29Mar 28, 2013 9:19 pm I agree.. in a perfect world I would love to have the luxury of saving 20% over $100k?! how many extra years would that take us? what would the increases be like in the meantime? for both construction and land? the lots in the area we like will be all gone or far from the town centre.. do we delay having kids even longer..? we're also wanting to build with our sister so our kids grow up together in a nice, family friendly suburb.. unfortunately its not a perfect world for us.. we'll have to design our house well. Only add value adding features/upgrades and hope the 14 months until registration sees a significant increase in land value.. Re: Valuations - how does it work? 30Apr 02, 2013 7:12 am ssjmark I agree.. in a perfect world I would love to have the luxury of saving 20% over $100k?! how many extra years would that take us? what would the increases be like in the meantime? for both construction and land? the lots in the area we like will be all gone or far from the town centre.. do we delay having kids even longer..? we're also wanting to build with our sister so our kids grow up together in a nice, family friendly suburb.. unfortunately its not a perfect world for us.. we'll have to design our house well. Only add value adding features/upgrades and hope the 14 months until registration sees a significant increase in land value.. It wasn't easy but my wife and I spent 5 years living tight and in a tiny rental unit to save up a 25% deposit. Now we have done the hard yards we don't have to worry about Lender Mortgage Insurance and our repayments are low during this time of low interest rates. The take home message here is that you have to make compromises and sacrifices to achieve your goals - but saving a >20% deposit is possible! Re: Valuations - how does it work? 31Apr 05, 2013 10:23 pm ssjmark at the moment no.. but now that we will be taking on a mortgage i'll look in to it.. any recommended insurers? I work in this industry and some of the direct products are not worth the paper they are written on due to restrictive definitions or underwriting at time of claim. Seriously speak to a financial planner. If you don't know where to look PM me your email and I can reffer you to one. Our build thread with Redink 11/1 - Prestart 5/4 - Slab 29/4 - Brickwork 27/5 - Roof Cover 20/6 - Lock Up 20/8 - PCI 10/9 - Handover Block of two storey townhouses requires painting on the roof. A brick parapet wall separates each unit and extends above the tiled roof. 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