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  1. #1
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    Default Home loan and building

    does anyone know if the bank takes into account how much the house will be worth once it's built when doing the loan application?

  2. #2
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    Yep! They definitely will

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    I hope so as then we shouldn't need to worry about lmi

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    Yes, it will be based on recent sales for a comparative house in the same area.

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    Yes - you will just need to submit full building plans and the builders contract.

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    When you're doing the loan application, also think about any "extras" you're going to include in your new home. It's particularly useful if you can include as much as possible in your building contract, and do your pre-start meeting before submitting all documentation to the bank.

    We had air con and floor coverings done outside of the building contract (to save on the builders margin) and our bank was happy to include the cost of these in the home loan because we had written quotes. You can also look at including things like window coverings, fencing and landscaping if those aren't covered with your builder or land developer - just get written quotes to give to the bank.

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    We are just going through this process at the moment. The bank took into consideration the price the house will be worth after it's built, but they won't value it over the contract price for land + build, so you're up for LMI if you haven't got 20% deposit in cash or other assets. Or depending on the industry you work in, you can get LMI waived with 10% deposit. We were able to do this and have LMI waived with 10% deposit cash so didn't have to get valuation on our current house which we will sell (loans with diff banks).

  8. #8
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    Well we have been told that all they do to calculate it was how much u bought the block for.... And the quote for the house to be built..

    That sucks.


 

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