Construction loan delays

Wow what a sweeping statement

 Ask any settlement clerk (or conveyancer) in the country, what the Number 1 reason for settlement delays or postponements is…..and hands down they will tell you one of the settling parties are going through a broker. 

I have to say i totally disagree with you. In most cases it is the settlement departments of the lenders requiring a given time frame to book in settlement and most purchasers solicitors not complying with this or documents returned incorrectly or borrowers not advising their current lender they are refinancing or doing a partial discharge.

Whilst a decent broker will follow through the whole process he / she will have little control over the settlement process.

I think there is a side to Hutch's comments that ring all to true sadly – I have seen people who could have walked in and out of a bank with a 'yes' have a brokered loan take a week or more to get the same result. While there are always excpetions and anumber of varying factors, many lenders do tend to treat the brokered loans with a bit of slack attitude – I can't explain why for sure – I have the feeling this is why many larger brokers tend to deal with the banks only, and with clients that have a 20% deposit mininum. I have 'brokered' some loans as a broker, and as using a 'lending panel' when there have been special needs, and myself, felt uncomfortable with the poor service and time frames provided by the particular lenders 'Mortgage Origination team'. ….and you can't do much about it either, and as Richard mentions, as far as settlement goes you have little if any control over it al all. That raises another point, most lenders have a totally different channel or department for their broker originated loans as opposed to their direct clients.  And yes, some brokers are indeed pretty poor too, there are some real cowboys, who recommend lenders based on commissions (that they still fail to disclose) and have staff who have little real life experience or skills, and no tertiary qualifications whatesover…)  I am not sure why a broker would recommend a rams construction loan over any other lenders construction loan without more detail,  but the real test of the whole situation would be to find out how long it was from when the broker supplied every document the lender required of them on your behalf, to when you got your written approval – you will likely find there has been some buck passing and toing and froing, as I don't know about the 'verbal' approval bit – 1st for me.
A good broker will really come into there own for balance sheet type borrowers, time poor people without 'deadlines', large investors, major  projects and constructions, or helping with loan structuring for maximum borrowing power……..but for the average person who is looking for a PPOR loan, and or buying a few investment properties, I would suggest go th your lender directly and save adding an 'extra link into the chain' – because that really is what you are doing.    That's what I have found to be the case over the last couple of years anyway…….. 

As an agent, I am so much happier when the Buyers are working with a Broker and include us in the communication because at leat we are kept in the loop unlike most Banks and Solicitors who seem intent on treating us a mushrooms.

Westpac have just completly stuffed up a deal with one of their clients and are now into penalty rates due to not being able to spell their clients name on the documents.   While I suspect that they are quite happy to have Brokers do all of the dirty work and save on wages/saleries, I think that they want their cake and eat it too.

Jon

I have a few loans going thru RAMS at the moment, and they are running a bit slow.

The process does take time depending on how motivated your morgage broker is. I have had great dealings with morgage brokers and, the process was 2weeks from interview-settlement which was great.

If you have had bad dealings with a morgage broker do not reflect this on the other morgage brokers. It only takes one to split the good and the bad.

I have in the past had a long term relationship with one of the big 4 banks.  It was only when I hit the lending limit as they advised that I turned to a broker for solutions.

Fortunatley I got a really good one.  By taking the time to understand my income from all sources and after cashflow he was able to negotiate a net increase in borrowings of 140k.  The irony of this is it was with the same bank. 

Yes that's right the mortgage broker could get me a loan signifiantly higher then their own staff could do.  I use the mortgage broker for all borrowing now and use a number of banks based on his advise.

Hi. Wow, what a mix up. I assume this is the same scanario as your other post, although they are explained differently.
First things first, with this lender in particular, the proceedure is that construction commences AFTER an 'Autority to Commence' notice has been issued to you. At that point, construction is to be completed within 12 months from this date. The loan could not have been formally approved until working plans and construction documents have been recieved by Rams, with the fixed price building contract. A panel valuer then reviews this, makes sure it is correct between both builder and customer (ie you) and that it meets building codes etc. THEN formal approval is issued, followed by the Authority to commence.
Now…….you need to clarify are you using a broker or a Rams Home Loan Centre? ie Does th building have Rams written all over the outside of it, or is it 'Joe Blow FInancial Services' or 'Mortgage' Broking'. ?The action you would take next will depend on that, although I am concerned you say that the lender has no knowledge of the deak, but you hav an 'approval letter?' What is on the letterhead?
Once the first valuation has been done, progress inspections are not required with one of these loans, which is builders love 'em – they get paid quicker. If you give us some more specifics I may be able to point you in the right direction.

I think everyone has a horror story a to tell about either a bank or broker, but I can tell you without hesitation that I have had a lot of deals put through by Cameron Perry and he is the best broker that I have dealt with.

He is thorough, courteous and clever with the way that he structures deals and always has had solutions to my tricky situations and never drops his bundle where I have others that have.
For those that don't know him he is based in Melbourne and myself in Canberra and the distance has not been a problem with either email or phone calls to keep in contact.

RAMS are totally inflexable, high exit fees and so SLOW I am counting down the days until we part company.

Never too late to look elsewhere flick RAMS they will do you no favours..

Give either Cameron or one of the other brokers on this forum a try you have nothing to lose and you might be surprised to find that they would get back to with a solution in a fraction of the time it has taken you with RAMS.

Good luck