Browse Forums Home Finance 1 Jan 25, 2016 9:38 pm Is it possible to change lenders once we want to apply for a construction loan, we already have a land loan with one lender but they are conservative compared to others in the total they will lend us, we want a bit extra which others are willing to lend. What are the drawbacks to this? Is this doable? Re: Changing Lender from Land Loan to construction loan 2Jan 26, 2016 7:20 am Hi, if you have enough equity it can be done- but it's a complete refinance, so the land loan has to come too. There will be costs involved, potentially new mortgage insurance, so you need to weigh up the benefits, but I completely understand that building the wrong house because of limitations will cost a lot more in the long run. Try a broker to work out how far you can go with the existing lender or who will work better for you if it comes to that. Rebecca Jarrett-Dalton Property crazy expert mortgage broker, love building new homes! Two Red Shoes mortgage broker http://www.tworedshoes.com.au/building Re: Changing Lender from Land Loan to construction loan 3Jan 27, 2016 10:59 am Hi whitefresh, You're asking a question that the team at Naritas encounters a lot, but all too often it is coming from people who are coming to us too late in the construction process. In short, if you have the following circumstances the refinance process should present minimal hassle: 1. The land is still vacant and/or construction works have not commenced at the site. 2. You've got a quote in writing from the existing lender as to what your exit costs are and they are not crippling (for most borrowers the cost should be ~$350 assuming you are not in a a fixed period and have not explicitly committed to pay other costs as a part of your finance approval). 3. That you are not liable to pay LMI for the new approval. LMI is commonly payable for above 80%LVR scenarios, however, it can be avoided in limited circumstances up to 90% LVR. 4. Your scenario is relatively plain vanilla i.e. the construction funding will be based upon a fixed cost building contract, you have clean credit, an average (or greater) credit score and solid net disposable income. If you have those characteristics there are even a number of lenders that will pay you a rebate upon settlement to refinance (example here: https://www.naritas.com.au/latest-news/ ... -cashback/). Hope this helps. Naritas Finance w: https://www.naritas.com.au l: https://www.facebook.com/naritasfinance t: https://www.twitter.com/naritas Re: Changing Lender from Land Loan to construction loan 4Jan 28, 2016 6:13 pm whitefresh Is it possible to change lenders once we want to apply for a construction loan, we already have a land loan with one lender but they are conservative compared to others in the total they will lend us, we want a bit extra which others are willing to lend. What are the drawbacks to this? Is this doable? From what you say, it seems that your existing lenders servicing calculator is more conservative than others out there. However make sure that the existing lender has taken your full financials into account and not missed anything (such as commissions, FTB, etc) which may increase your borrowing capacity. Failing that, you can apply elsewhere for the construction loan as long as you refinance the land loan to the same lender (you can't have them with separate lenders). As already pointed out, the maths need to be right. You don't really wont to be paying LMI all over again if its a huge cost. You also need to make sure you don't unnecessarily apply with lenders for no reason otherwise you may fry your credit file. Getting upfront valuations will help avoid this. Cheers Tom Re: Changing Lender from Land Loan to construction loan 5Feb 05, 2016 8:52 am Thank you replying. Just another question, we have a land loan for $184000, and value of the land now I'm estimating to be $210000, are we able to use this equity to construct a new home? How can we organise our own bank valuation to see if I'm close with my estimate? Re: Changing Lender from Land Loan to construction loan 6Feb 05, 2016 9:10 am Yep, sure ca, if the valuer agrees based on other similar properties selling. Talk to your broker for a valuation, or the lender organises one as part of the application. Rebecca Jarrett-Dalton Property crazy expert mortgage broker, love building new homes! Two Red Shoes mortgage broker http://www.tworedshoes.com.au/building Re: Changing Lender from Land Loan to construction loan 7Feb 05, 2016 6:49 pm Didn't refund home loans go broke because the cost of training and professional development as well as running the business prove the model unsustainable? There's great value in great advice, and it doesn't add to the cost. Rebecca Jarrett-Dalton Property crazy expert mortgage broker, love building new homes! Two Red Shoes mortgage broker http://www.tworedshoes.com.au/building Re: Changing Lender from Land Loan to construction loan 8Feb 05, 2016 7:11 pm Refund home loans was done by the wrong people in the wrong way at the wrong time. Most modern day mortgage brokers share their commissions with people who refer business to them or are scraping the barrel for business in the first place so hold on to every cent they can. Our model is simple, we pay our customers what most brokers pay 'referrers' which is very affordable and allows us to earn a good income whilst sharing the spoils with our valued customer. In terms of experience, having been in the industry for 10 years and settling over $100,000,000 of loans in that time, everyone e can rest assured they are in safe, secure and experienced hands. Thank you for the comment Re: Changing Lender from Land Loan to construction loan 9Feb 05, 2016 7:36 pm Sorry Is that a typo, only $100,000,000 in 10 years? Rebecca Jarrett-Dalton Property crazy expert mortgage broker, love building new homes! Two Red Shoes mortgage broker http://www.tworedshoes.com.au/building Re: Changing Lender from Land Loan to construction loan 10Feb 05, 2016 7:49 pm Not at all. Over ten years, one hundred million of lending may seem a lot however equates to less than $200,000 per week. Experience, service, knowledge, advice, honesty and free cash reward for loyalty.....makes sense to us and hope it does for the readers of this post too. Have a great Weekend to everyone Recharge (John) Re: Changing Lender from Land Loan to construction loan 11Feb 05, 2016 8:03 pm Actually $100,000,000 is what many (small) brokerages do in a year. Successful brokerages with large client bases do multiples of that amount per annum. It's clear that Bec was making that point and not remarking upon your noteworthy achievement. Furthermore, unless you're actually answering the OP's question all you are doing is posting SPAM and bringing down the tone of an otherwise vibrant forum. Naritas Finance w: https://www.naritas.com.au l: https://www.facebook.com/naritasfinance t: https://www.twitter.com/naritas Re: Changing Lender from Land Loan to construction loan 12Feb 05, 2016 8:18 pm Clearly I have struck a chord with standard brokers who operate the ways things are always done. Spam is not highlighting to the general public how they can claim back money for good service through an innovative model. Enough of the negativity towards innovation please, really is quite embarrassing for those clearly attacking something different that the good people who look up these forums do not need when they are looking at alternative ways of doing things. Appreciate all the input and if agreeing to disagree is the way forward them so be it. Everyone is different and every business is unique. Again, thanks for all the input and am sure any further negative and derogatory comments towards our innovative advise for a new age customer can be reviewed by the site moderators. Re: Changing Lender from Land Loan to construction loan 13Feb 05, 2016 8:35 pm Let's be clear here: a) Both ASIC and lenders frown upon the practice of inducing customers to take loans based upon commission refunding. In fact, most lenders and industry groups went on to point out exactly what Bec has said earlier, the cost of: - providing secure systems to house sensitive data & communicate with clients - ongoing & regular training for degree qualified and industry certified staff - quality controls - regulatory oversight and compliance obligations Have dictated that the practice is by and large unsustainable for any business that is actually delivering on those qualitative factors. Furthermore, the practice induces unwary consumers to deal with some of the most desperate operators in the broking space and take products based upon a promise of cash and not the appropriateness of the product to their circumstances. b) The practice is not innovative. There have been dozens of examples over the history of the industry of companies that have come and gone doing precisely the same thing and with nearly congruent outcomes which include: - Dis-satisfied clients leading to large complaints volumes - Poor compliance and information safety practices - Poorly trained and low quality staff - A reputation for zero after sales service - Ultimately collapse or stagnation of the corporate entity due to the above factors. c) Posting an ad that doesn't address any aspect of the OP's question is most certainly SPAM. Especially when, in addition to being off topic, it is designed to mislead the OP. As a site sponsor we actually appreciate the input of posters who are making a genuine effort to add to the community - even if they happen to be representatives of companies that compete in our space. Ultimately, a vibrant and useful forum such as this delivers benefits to everyone who treats it with respect. Naritas Finance w: https://www.naritas.com.au l: https://www.facebook.com/naritasfinance t: https://www.twitter.com/naritas Re: Changing Lender from Land Loan to construction loan 14Feb 05, 2016 8:45 pm Wow, weak, waste of time. Stop embarrassing yourself and the industry. Full compliance, full disclosure and absolute honesty is not frowned upon by anyone. Your passion to protect your commission is clearly stronger than your passion to understand anything else. I have had enough of this abuse from someone who offers no real argument. Me and over 50 other organisations in Australia operate using a similar model. One larger company has been on today tonight and a current affair more then three times for the right reasons, another has won multiple awards from a leading financial publication......interesting how highlighting that you pay/sponsor this site to not advertise/spam but ultimately slate anyone else providing an alternative. The ASIC investigation on broker commissions this year will show their opinions on our industry and some would say it's all the under the table referral agreements between typical brokers that will ultimately be the case of them reducing. Seriously, you are very much embarrassing yourself to the world here and suggest you stop. I did not attack anyone in my original posts. Was providing an alternative way of thinking. You are just being unprofessional and I ask you to stop please. We do not take pleasure in being abused in an online forum Re: Changing Lender from Land Loan to construction loan 15Feb 05, 2016 9:08 pm John, you're not a fee for service adviser. You're getting paid commission as a broker. You just give it away in the hope someone will deal with you. So to say that my comments are motivated by some desire to hush your business model is laughable. Furthermore, our company actually offers a full fee for service model and employs degree qualified staff. So we're not at all phased by the concept of professionals billing for their advice - it's a part of our existing business model. We also offer services that see us remunerated by the lender with full and upfront disclosure of all remuneration and after nearly 15 years of business we have a completely blemish free record with the Credit & Investment Ombudsman. Furthermore, I've also personally lectured in financial literacy programs that I helped develop and that were government certified. These same programs were promoted by some of Australia's largest charities who deal with members of our community who are dealing with financial hardship and often were the victims of unconscionable conduct in lending. In addition to this, I've also been invited to attend policy meetings for industry groups. As such, I'm rather well qualified to pass an opinion on this topic. Naritas Finance w: https://www.naritas.com.au l: https://www.facebook.com/naritasfinance t: https://www.twitter.com/naritas Re: Changing Lender from Land Loan to construction loan 16Feb 05, 2016 9:17 pm That is a much better and more valued response. Ten years in the industry and average $3m- $5m in per month over the last few years. I absolutely do not want to directly attack anyone , just offer an alternative to what I believe, as is allowed in a modern society, to a way of doing things that is not truly engaging to the modern and emerging type of customer we deal with. Again, sharing the spoils with an empowered customer vs sharing the spoils with an Accountant, Real Estate Agent or Financial Planner, to our business adds more value and creates an organically growing relationship and organic referrals as well as repeat business. As I have mentioned there is nothing wrong with our industry, we all want to deliver sercive.....we do it a little differently under a different ethos. I too have spent much time educating, in fact two years+ to teaching brokers and many others. Being different is the new normal and we love doing what we do delivering results, value, service and money back to our customers. Thanks for the 'passionate' chat and good night Re: Changing Lender from Land Loan to construction loan 17Feb 08, 2016 7:31 pm Recharge Clearly I have struck a chord with standard brokers who operate the ways things are always done. Spam is not highlighting to the general public how they can claim back money for good service through an innovative model. Obviously some people don't read the rules prior to joining this forum. You included. Your first post and it's a blatant self servicing advertisement. Not even a hint of disguise. Recharge Again, thanks for all the input and am sure any further negative and derogatory comments towards our innovative advise for a new age customer can be reviewed by the site moderators. I think you may find it's your comments that may be reviewed. Cheers Tom 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 How much are you ahead in payments compared to where the build is at? Have you fully drawn down the loan? 5 11893 Hi All, I'm new here! I'm in a block of 4 apartments (Waverley council) and looking to change a window to a sliding door. The window faces an enclosed garden (with a… 0 5525 |