Browse Forums Building A New House 1 Jan 22, 2007 3:12 pm Hi All,
I just want to find out what's people experience on this matter. My loan has been approved by the bank (Colonial) for the construction of a new house. The builder is asking for the statement of guarantee that the bank will release the fund. The problem is the bank wouldn't give that letter until I paid my share (I contribute 20% of he total construction cost). How can I pay first if the building hasn't started ? The only solution I think so far is to pay the builder 20% now so that I can get a bank guarantee. But that doesn't seem right, and I am not sure what is the implication. The bank and the builder insist on their stand. So I am wondering what is the standard practice under my situation. Any help or experience is appreciated, thanks. Re: problem on bank's guarantee for construction loan 2Jan 22, 2007 3:22 pm Ring the bank, tell them to stop mucking around and to give a solution, or your next phone call is to a broker to find a a new bank.
It is amazing what they will do sometimes..... Adrian B Bit odd 4Jan 28, 2007 11:22 am Hi Connexion
Do you have your letter of approved finance from Colonial? Surely the builder would be accepting that?? Who's the builder? Are they mainstream or a smaller builder? Have you paid any deposit to the builder? Regards Re: problem on bank's guarantee for construction loan 6Feb 13, 2007 6:13 pm How about sending the builder a copy of the signed loan docs, some builders want that.Some banks provide a "builders pack" which can do the trick. Doesn't seem to be a standard procedure. 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 19091 How much are you ahead in payments compared to where the build is at? Have you fully drawn down the loan? 5 11906 2 5838 |