I am in the process of applying for a construction loan and have been only part approved by St.George bank. I ahve requested fiannce to $160k plus $40k in other contracted costs that my builder will not complete, that i will get other contractors to complete (50m drive, storm pits, subdiv costs etc).
St George have said they will only finance the $160k builders ‘tender’, not the other costs and that I have to pay for those myself. I could include them in the builders tender, however instead of costing me $40k they’re likely to cost $60k+ because it’s doing all the yuck stuff that builders don’t want to be a part of.
Any ideas where I could get this fiannce approved? I’m wanting max finance – willing to spend a little on LMI to get the most cash I can. I’m thinking about going to Westpac. Any ideas from others?
Help please. And I need it urgently. I’m going to get all my documentation back from St George and cancel the application tomorrow. (problem is they have the land so i’m going to be up for exit fees on that mortgage too!!)
thanking anyone that can help.
Nat
Hi Nat,
How much is the fixed price contract? Minus the additional 40k?Regards
Colin Kidd
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Nats – Can you give us more information on the figures and we might be able to assist you through the Dragon.
Cheers
Richard Taylor
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Nat,
We did a similar thing, essentially we came to an agreement with the builder to undertake certain parts of the construction of a townhouse. In our case we undertook the framing, tiling, and some other work as we have team members with those skillsets. The way that we worked it is that essentially we will be sub-contracting to the builder, he asked us to quote on the work, we quoted, then he added our quotes to the tender/contract and the bank provides the finance on our estimates and we do the work.
This may also work for you if the builder is happy to offer this.
Good luck.
Dave.
my builder would want a 20% margin on anything. I haven’t bothered approaching him on doing it at no margin because to me, then the bank will have to make the drawdowns to him, not to my contractors that I’m going to get to do the work.
Some numbers:
Land value: $130k
Mortgage on land: $58k
House contract w/builder: $160k
Other costs: $40know i know most of you would look at this and say it’s easy, just use the equity in the land. But, I’m wanting to pull that equity money for a reno on another property, hence why it’s not really available money.
The way I see it, St.George should be basing their lending on valuing the property at land ($130k) plus house($200k) so $330k valuation (end result will be more like 380-400k). what they are doing is saying land ($130k) plus builder contract (160k) is $290k valuation.
I am lost at the stupidity of these people down at the bank. They will lose business over this $40k dispute – this is a 3 decent size mortgage account with great serviceability for them and I will spend the fees to pull them all elsewhere pending this outcome.
Nat
i cannot see why SGB wouldnt take the end value.
I have done many a deal with the dragon that basis. Jist threaten them you will go elsewhere.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.Richard Taylor | Australia's leading private lender
I am just working on a few construction deals with St G at the moment, and they have indicated they will go at 75% of end value – this is for a owner builder too.
Terryw
Discover Home Loans
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