Browse Forums Building A New House Re: Financing 'Additional Items and Works' outside of contra 2Aug 02, 2016 6:35 pm Natsi Hi, I'm new to the forum and the new home build process, although have been stalking for a while. We are nearly ready to jump in and seriously begin discussing build options and tenders, but I am a little confused on the home loan/finance side when it comes to 'additional works' and costs. I'm looking at Beechwood Homes, from what I understand there are a number of things which I will need to arrange seperately, such as driveways/landscaping/fencing/window coverings (not to mention the 'would love to haves' like a pool!:) ) I know I can include these quotes with my building contract to the lender, but what I can't seem to find out is at what stage the funds for these are provided. If I put all my funds in to the purchase at the outset, reducing the required loan, I would then not have funds to pay for these items. Hoping from others experiences I can try to understand when the bank pays out for this part of the build, as they are not part of the construction contract - is it only after these items have been completed, meaning I am better to hold back funds for these additional items to be paid for??? Hope this makes sense and any guidance on how the finance for these additional items would be greatly appreciated! Hi, I think it's better to post your question in following thread viewtopic.php?t=32446 Re: Financing 'Additional Items and Works' outside of contra 3Aug 02, 2016 7:36 pm I am building in WA, so a bit different but I work for a bank so have a bit of knowledge. We included quotes for air-con, driveway, blinds, and flooring with our building contract to be included in the valuation and mortgage. If you can, put in high quotes, I'll explain in a minute but one of the reasons is that it can increase your valuation as they use the quoted figures (but not always). In terms of deposit, using ballpark figures, if your total val was $500,000 and you had a $100,000 deposit, you would be at 80% lend. This is good from an LMI perspective. Better than having a $450,000 valuation and 50k deposit (90% lend) and using the $50k cash to get the items done separately. In our case, the bank has basically used our deposit first to pay the builders first progress payment, we now have one more progress payment for the builder but they still have the money for the other works to disburse. Back to the high quotes, if you get a quote for say $15,000 for air con, but you use a company that only charges $13,000, you then have $2000 extra after all the works have been done. You can either put back into your loan or go spend it! Who doesn't have more things to spend money on when they build? Our Custom Dale Alcock build in the Village at Wellard https://forum.homeone.com.au/viewtopic.php?f=31&t=78620 Re: Financing 'Additional Items and Works' outside of contra 4Aug 02, 2016 7:39 pm Another thing to add, we are at the business end of locking in our post handover trades, the Bank has been quite happy to pay a deposit to our blinds supplier and aircon installer, I just sent through a claim for the 50%/30% deposits. When we want the balance they ask for a photo of the finished works as proof it's been done. Our Custom Dale Alcock build in the Village at Wellard https://forum.homeone.com.au/viewtopic.php?f=31&t=78620 Re: Financing 'Additional Items and Works' outside of contra 5Aug 03, 2016 7:42 pm Wellard2ndTimers Another thing to add, we are at the business end of locking in our post handover trades, the Bank has been quite happy to pay a deposit to our blinds supplier and aircon installer, I just sent through a claim for the 50%/30% deposits. When we want the balance they ask for a photo of the finished works as proof it's been done. Thank you so much Wellard2ndTimers, you have given me more information and a much simpler understanding, than two brokers who I have spoken to in an attempt to understand this process!! So keep the funds available for payment to the contractors if possible - and make sure I am providing the highest quotes to be sure and maybe see additional/excess funds at the end for that nice new sofa Thank you! Re: Financing 'Additional Items and Works' outside of contra 6Aug 03, 2016 7:57 pm Wellard2ndTimers Another thing to add, we are at the business end of locking in our post handover trades, the Bank has been quite happy to pay a deposit to our blinds supplier and aircon installer, I just sent through a claim for the 50%/30% deposits. When we want the balance they ask for a photo of the finished works as proof it's been done. Thanks Wellard2ndTimers for sharing info. I was dying to get similar info from brokers but they are hopeless. Don't u mind if I ask u what Bank u worked with? Thanks again Re: Financing 'Additional Items and Works' outside of contra 7Aug 03, 2016 8:11 pm Glad to help guys. I still work for the bank so can't say, but not one of the big 4! Our Custom Dale Alcock build in the Village at Wellard https://forum.homeone.com.au/viewtopic.php?f=31&t=78620 The best advice is for you to get a competent building consultant to guide you through your build 7 5108 Yeah sorry man, thats always been my fear during this first time build.. we have literally just hit lockup as-well, so ive been praying for no issues. Our mortgage /… 3 3356 Hi All, I just wanted to close this topic out with an update. So we ended up agreeing to a number with the insurance company, and after an extensive amount of hand… 8 24919 |