Browse Forums Home Finance 1 Jun 15, 2015 2:15 pm I'm building my house through a project builder, and the land is not yet available (they estimate December this year). For this reason they said there will be a "standard MBA rise clause" in the contract, which essentially states they may pass on any increases in prices to me for materials/labour, if they can provide documentation (e.g showing invoices etc). What are the implications of this when I get a loan from a bank? Each bank asks for a 'fixed price contract', however the rise clause essentially means the price is not fixed and hence my liability is not fixed. Are there any other suggestions in terms of how I can reduce my exposure? Re: Rise clause in build contract + getting a loan 2Jun 15, 2015 2:25 pm ThHi JasOnt The contract is fixed as soon as you sign it and they start If you are delayed because of land being unavailable,planning, preparing Cds,starting on site, etc,etc, beforehand There might well be a price rise...you might need to factor that into your borrowings Designer,Engineer (Civil,Const & Envir),Builder,Concrete & Masonry Contract.Struct Repairs Re: Rise clause in build contract + getting a loan 4Jun 16, 2015 10:10 pm I would recommend you have the builder put an allowance estimating the total increase into the contract before you get a valuation done - if you don't spend it it can be varied out, but if you try and increase the valuation later its very difficult. Rebecca Jarrett-Dalton Property crazy expert mortgage broker, love building new homes! Two Red Shoes mortgage broker http://www.tworedshoes.com.au/building Unless there is something in special conditions the builder does not have to give you timeline. If your demolition contractor has not removed Asbestos and it was found… 12 29007 How much are you ahead in payments compared to where the build is at? Have you fully drawn down the loan? 5 12142 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 19706 |