Browse Forums Home Finance 1 Dec 17, 2014 2:18 pm garage and to a separate living area pod only) architecturally designed home on bearers and joists attract a significantly different bank val for a construction loan to a 4 bed, 0 study single level on a slab (cut and fill). Knock down rebuild in an established area where new homes are primarily double story. Is LMI payable on a construction loan where the LVR is determined at greater than 80/20? I know that's a hard question. how much do bank vals vary depending on who they use? Re: Bank val for construction loans 2Dec 17, 2014 4:13 pm Hi Leksie, The valuer uses the average of the recent sales prices of other homes on similar sized land, similar attributes to yours - and they consider the cost of the build and the value of the vacant land too. They will allow for it being new and architecturally designed. If there's nothing to compare it to in your area they may be able to go out of the area a little, but comes back to what they can support with evidence. If there's anything like yours recently sold - give them that information! As to bank vals varying, they do so between firms and between lenders - there seems to be different instructions, but it all has to come back to the sales evidence. And yes, mortgage insurance is typically payable if you're browsing more than 80%, there are a couple of exceptions to this or strategies to avoid it. Sounds like a lovely home! Bec Rebecca Jarrett-Dalton Property crazy expert mortgage broker, love building new homes! Two Red Shoes mortgage broker http://www.tworedshoes.com.au/building Re: Bank val for construction loans 3Dec 17, 2014 4:41 pm Thanks Bec for your detailed reply. Ultimately our goal had always been to build the home we wish to live in not design around these factors. It is a nice established area with some amazing homes closer to the water. Ours is further back but the whole suburb is a good one really. Can you expand more on strategies to avoid? We already have half the equity in the land so that will help a lot. Are you referring to say leaving enhancements out of the contract? I guess with that you then need to fund those out of your own pocket rather than the mortgage. We need to get finance asap as I will be on leave from work soon. If the builder does a contract before DA approval with the understanding variations may occur based on council (unlikely) will the bank have any issues with the plans not being DA approved yet? I can't imagine it's practical for everyone to go through a DA without knowing their finance situation. Re: Bank val for construction loans 4Dec 18, 2014 9:17 am I absolutely understand! There's only one way to find out - get your broker to order a valuation and see what you're working with. There are lenders who will consider up to 85% without mortgage insurance and there are loans with guarantees where you can avoid it al together, but if you have a load of equity in your land it's worth trying a valuation first. The bank will issue an approval without the DA approval on the plans, absolutely, so yes you should get moving and I would want this before I went further too. Bec Rebecca Jarrett-Dalton Property crazy expert mortgage broker, love building new homes! Two Red Shoes mortgage broker http://www.tworedshoes.com.au/building How much are you ahead in payments compared to where the build is at? Have you fully drawn down the loan? 5 11893 We are about to commence a new build I and Iām reading about defects along the way. My question is should we employ a independent building inspector to come in and… 0 5235 Can you give advice on how to get missing certificates needed for a form 21? Our bank requires us to provide one but we are missing 4 building certificates from our first… 3 71775 |