Jun 02, 2017 7:10 pm
We are in a very strange situation and thought might ask if anyone here might be able to help.
We purchased a nice old house with the intention of doing some major renovating/updating to move into long term.
We are putting in the majority share of the funds for the reno (around $140,000) and asked the bank for a loan ($87,000) to be able to fund part of the reno. (kitchen and part of the builder/chippie cost-removing walls, re-cladding exterior etc.)
As requested by the bank we got together a few quotes from different builders.
We were approved for the loan and signed the papers from them and everything after they had done a valuation based on the intended works. bank valuation = $560,000 , current loan amount of $360,000.
We are now 3 months in, (and owe money to many trades) and the bank has turned around and said they are no longer going to give us the funds.
They are saying because we are paying for the other trades directly eg. plumber, electrician, tiler etc. that they will not fund anything.
We have only ever asked them to cover part of the builder/chippie works and the kitchen/stone.
Does this sound right? Is there anything we can do?
Re: Renovation loan help >_<2
Jun 05, 2017 11:16 am
Huh? Thats really strange, did you issue documents and sign and return them? If so, I think whats probably more the case is they make you use all your money first before they start paying invoices, so they always retain as much money as is needed to complete the works to the valuation standard so they aren't left with a half finished security if you decide to take off around the world with your money
If you have a full approval and you signed docs to agree to the loan then I suspect thats the situation.
Property crazy expert mortgage broker, love building new homes!
Two Red Shoes mortgage broker
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