Browse Forums Home Finance 1 Jul 26, 2017 9:31 pm Hey all, I hope this makes sense! Our bank has sent us an email saying that based on our variations during the pre-construction process and the other quotes we have given them there will be a shortfall of $4500ish. Basically after landscaping/fencing and pool we are putting in we will have to fork out some of our own money. We were aware of this and now plan on getting the fencing down through a friend of ours and paying them from our account rather than as part of the mortgage. We also plan to do our own turfing etc. The email says that we need to 'pay this shortfall in advance.' I'm a bit concerned they won't pay the progress payments on the house until we pay this but we don't want to use the quotes we gave them. We have tried calling but couldn't get through. This is actually an email that was sent two weeks after we requested the 5% deposit to be paid to the builder. When we called we were told it had been paid, then we get this email which leads us to believe it hasn't been paid and actually our builder has started on site already!! Any advice welcome! First Home Owners and Builders - building Zara29 with Metricon in 2017. Our Build - https://forum.homeone.com.au/viewtopic.php?f=31&t=87366 Re: Bank Loan - shortfall 2Jul 26, 2017 10:18 pm we have approx 15K in variation upgrades. When they appear on the invoice from the builder we will need to pay out of pocket. but they have not listed it on the progress payments so far so not had to pay...yet if you are concerned ask the builder for a copy of receipt of payment to check how much they paid. we get one at each progress payment. JG King Lexington 240 Acreage build https://forum.homeone.com.au/viewtopic.php?f=31&t=87762 Re: Bank Loan - shortfall 3Jul 27, 2017 7:06 am I just posted in here because it was too late to get onto the bank. Basically when we submitted our loan application we put through building works but also got quotes from others for landscaping and pool works. As we added things to the house we were aware that the landscaping budget from our mortgage was getting tighter, however by that stage we had decided we weren't going to go with the people who had done the quote - because we found a cheaper one. We have enough money in the mortgage to cover the build and the valuation of the build was still well above what we are paying for it. We just figured we would use our own money for landscaping but now is seems like they want us to cover what they think will be the shortfall based off the quotes we have supplied from the third parties. I mean we can actually cover it but that would leave us with next to nothing in our savings and with two kids, renting and a mortgage now that's a really scary thought. We believed the 5% deposit to the builder had been paid but it looks like it has not been! I don't even know how our builder could start on site without it. First Home Owners and Builders - building Zara29 with Metricon in 2017. Our Build - https://forum.homeone.com.au/viewtopic.php?f=31&t=87366 Re: Bank Loan - shortfall 4Jul 27, 2017 8:55 am Hi Rach, the bank always work on retaining exactly what the contract say are required to complete the build hence you have to put your money in first - this is so they don't get to the end of the build and find that you perhaps have spent the money and now have a builder who cant be paid the final amount, so won't hand over keys You'll get the money back at the end if it isn't taken up in the contract but thats no help to you now in regards your comments on leaving your savings short - I know. The bank should not have told you the payment was made if it isn't, double check the progress payments but call centre staff also aren't very highly trained unfortunately and often make mistakes. Can you broker help by going through their channels direct to the construction team? Rebecca Jarrett-Dalton Property crazy expert mortgage broker, love building new homes! Two Red Shoes mortgage broker http://www.tworedshoes.com.au/building Re: Bank Loan - shortfall 5Jul 27, 2017 10:46 am As already mentioned, the bank uses the total building cost (including any external quotes), and then calculates the difference between that cost and the available loan. That difference (shortfall) then needs to be put in by yourselves first before the bank releases any money. Really the person at the bank (from your post it seems you went direct to them and not through a broker) should have explained this to you at the beginning. If you tried to change things now by taking items out, it would most likely need to be revalued and application reassessed by the bank as you are changing the parameters. Cheers, Tom Re: Bank Loan - shortfall 6Jul 27, 2017 4:42 pm Thanks everyone. Sadly - we actually went through a broker. This was never explained to us. It doesn't surprise me though because we were also rejected the FHOG because of a mistake they made on the form, so we have to resubmit. I won't go into anymore details but they were just horrid to deal with and we should have just gone with the bank. Anyway - my husband called today and it was as I expected that we had to pay in advance. We have now sent them other quotes we have since obtained which detail the landscaping at about $8k less. So it should all balance. They said it will take them 24hours to assess. I can't believe the bank took two weeks to email us, but I'm obviously naive. I have no idea why the builders have started if they didn't receive the 5%!!! They are still on site today, hoping we can get this fixed up and paid and no impact is made on the progress of the build. Thanks all for your advice. First Home Owners and Builders - building Zara29 with Metricon in 2017. Our Build - https://forum.homeone.com.au/viewtopic.php?f=31&t=87366 Re: Bank Loan - shortfall 7Jul 27, 2017 5:52 pm Oh sorry to hear that Rach, but glad you got a solution. Rebecca Jarrett-Dalton Property crazy expert mortgage broker, love building new homes! Two Red Shoes mortgage broker http://www.tworedshoes.com.au/building Re: Bank Loan - shortfall 8Jul 27, 2017 9:45 pm Oh, I didn't realise that you went with a broker. The way you were saying that you were calling a bank direct is something that a broker would do on your behalf. So sorry to hear about your bad experience. It tees me off when I hear stories like that. Those knucklehead brokers who don't do right by the client give the rest of us a bad name. Cheers, Tom How much are you ahead in payments compared to where the build is at? Have you fully drawn down the loan? 5 12359 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 20085 Hi, you've probably already resolved this, however, Commbank will probably pay the funds to you after you send evidence the work is done regardless the change in the quotes. 1 36595 |