CBA construction loan - out of contract items

hambo12 · Nov 02, 2022 1:08 pm

We are currently in the middle of a new build and have a construction loan with CBA. We have some items that have been listed as out of contract and have previously received quotes and included as part of our contributions.

CBA required us to pay our entire contribution before they would make progress payments, which means we contributed the full quoted amount of the out of contract item. Fast forward to today and the invoice has come in at $8,000 less than quoted as we made some smarted choices.

My question is: can we retrieve this excess we have contributed as we would like to use it rather than reduce the loan amount that we signed for with CBA. Is this possible?

I have asked the bank, however our lender is on leave at the moment.

Thanks.

becjarrettdalton · Nov 02, 2022 1:45 pm

Hello - not knowing your personal circumstances I can't give you specific advice, but, for my clients when this happens once they've sent in the final payment we get them to write to the bank and ask for the rest of the money to be put in their account. Providing the items are all there (regardless you made more economic choices) the bank should release the funds. Happy moving day!

hambo12 · Nov 02, 2022 2:44 pm

becjarrettdalton

Hello - not knowing your personal circumstances I can't give you specific advice, but, for my clients when this happens once they've sent in the final payment we get them to write to the bank and ask for the rest of the money to be put in their account. Providing the items are all there (regardless you made more economic choices) the bank should release the funds. Happy moving day!

Thanks so much Rebecca - I was hoping this would be the case but will wait for the bank for the final word. Thanks again for the fast response.

Noname · Nov 03, 2022 12:54 pm

Surplus funds are credited to your acc post final payment to the builder generally. However I'm not familiar about your contribution process for out of contract items. Did you pay these to the trades or did you pay the contributions to the bank?

hambo12 · Nov 03, 2022 1:09 pm

Hi Noname,

Yes we paid the contributions to the bank and then they would pay trades from that.

I received confirmation that the bank will reimburse funds at completion of the build, however it could be an issue if it isnt like-for-like for materials (i.e. if we picked lower value materials to save money, affecting valuation).

Hope this helps someone in the future too!