Browse Forums Home Finance 1 Jan 27, 2016 6:33 pm Hi All, If I borrow $315,000 from bank and my construction is completed. When I move in, I still have fencing and landscaping pending, because that we didn't include in our contract with builder. Can we go back to bank and borrow some more for these adhoc costs or is there any way, we can get this cost provisioned before the loan approval. My friend suggested to ask builder to provision this cost under contract and then I can use it, but builder said they don't do such contracts. Or option is that I save enough and don't go back to bank for borrowing more. Please suggest. Borrowing after construction is completed 2Jan 27, 2016 6:42 pm My bank won't accept third party quotes for fencing, landscaping, window furnishing etc. so I am in the same boat but I've chosen to borrow a little bit more for construction and use savings to pay for those items.
You could Maybe re-mortgage (refinance) with a different lender later on?? Re: Borrowing after construction is completed 3Jan 27, 2016 6:46 pm How would you be able to borrow more than what is in contract? And could you please explain what do you mean by re-mortgage with a different builder later? Sorry for naive questions, but i am new to this, as this is our first build. Re: Borrowing after construction is completed 4Jan 27, 2016 6:48 pm Hi dharmesh, Generally speaking, it is common for people to get there home revalued at the completion of construction and do an equity release to cover such costs (or refinance to a new lender who will provide such an equity release). Most borrowers wouldn't typically need to do a full construction lend for the landscaping unless it was a project that involved a new DA and major structural works that could impact the home dwelling. If you didn't have the equity come completion and you were seeking a fast solution for a relatively small sum of money (typically under $20K), you may be able to get a personal loan to cover that cost. Bear in mind that personal loans are typically much more expensive than a home loan (~10%p.a. vs 4%p.a.) and you'd ideally only want to consider such an option if the opportunity cost of not doing this landscaping whilst the builder was on site justified the added cost. Hope this helps and if you need some guidance please feel free to send me a PM. Naritas Finance w: https://www.naritas.com.au l: https://www.facebook.com/naritasfinance t: https://www.twitter.com/naritas Re: Borrowing after construction is completed 5Jan 27, 2016 7:05 pm Sorry I meant re-mortgage with a new lender. Which is the refinance option discussed Re: Borrowing after construction is completed 6Jan 27, 2016 11:59 pm Revaluate and borrow equity then concolidate the loan. We still have to spend 40k for retaining walls, lanscaping and fencing. No allocation for plants yet! Re: Borrowing after construction is completed 7Jan 28, 2016 7:20 am My only advice - one loan can be better than two. If your earlier loan is unfixed then talk to them. Rates are low and by increasing the term slightly you might find your payments don't go up. Then up your payments later to compensate. The old fortnightly payments - ie 26 a year - is always a good idea - one extra monthly payment a year. Re: Borrowing after construction is completed 8Jan 28, 2016 6:41 pm If your builder doesn't want to do it, but your bank allows third party quotes, get them done for the fencing, etc and include them along with your building contract to the bank. That way the bank can finance them when needed. If your bank doesn't allow third party quotes, then as most valuations are done on a land plus construction costs, they don't represent the true value once the project is finished which can be much greater than the actual cost when you look at comparable houses in the area. That's when you can do a refi and pull out equity for any remaining bits and pieces. Cheers Tom Any advice on a builder in NSW who is demanding an extra 22000k after the house is completed and contract paid in full .Standard HIA contract. Never received a variation.… 0 20515 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 11631 I can help you with all that, you can PM me with details if you wish 3 5838 |