Homeside Construction Loan

[Seaview]

Hi,

Trying to find out what Homeside Require for unconditional approval of a construction loan for building 2 houses on one block (to be sub-divided into strata or torrens title at the end).
i.e. 1.) Do they require council approved plans, or just a signed building contract with draft plans?
2) LMI @ 90% on a 288k construction loan. Will they capitalize any or all of this? We will already have a 90% land loan with them first for $139k. Will they aggregate both loans for LMI purposes and charge us a higher rate? Will the capitalize a certain proportion/amount of LMI (if any) for either or both loans?]
Help. Any thoughts are very welcome.
Thanks in advance
Seaview

 

[Seaview]

Me again,
Forgot to ask: will Homeside let you provide a Provisional Costing for driveway, fence etc from private suppliers? (as they are cheaper than the builder). If yes, is a simple estimate from us sufficient or do they require formal quotes from each provider?
Thanks

 

[Rolf Latham]

I would have thought my broker would be a good start: )

1. Valuer will generally prefer council approved, credit LMI dua usually want council approval unless there is a good reason

2. LMI can be capped above 90, but will raise the rate and risk of decline.

3. LMI will be amalgamated even if loans arent SIngle security as is. go for 88 % + cap lmi if u have the equity

ta
rolf

 

[Aaron_C]

If you're going through Homeside wouldn't you have a broker that would tell you that?

But to answer your questions:
1) Banks have a checklist of all the required documentation. This list runs longer than my arm but they basically need stamped plans, copy of the builder's fixed price contract, building permit etc etc
2) Hmm they might consider capping LMI - but you are going to pay LMI twice??
3) No. They need a fixed price contract. 'Quotes' aren't worth the paper they're written on.

 

[Peter_Tersteeg]

HomeSide will want council approved plans prior to any drawdowns. You should be able to get unconditional approval without the council approvals but you will need a fixed price builders contract.

HomeSide can capitalise interest over 90%, but be aware that their interest rates increase as soon as you borrow more than 90%.

 

[Mick C]

Me again,
Forgot to ask: will Homeside let you provide a Provisional Costing for driveway, fence etc from private suppliers? (as they are cheaper than the builder). If yes, is a simple estimate from us sufficient or do they require formal quotes from each provider?
Thanks

Consider getting your builder to sub-contract these private suppliers and pay a small fee for doing so?

When you start supplying private quotes outside your fixed price it causes a lot of problem from the bank's point of view, and they may not give you the full funds that you require or most likely the valuation will fall short in general as these private quotes will be noted in the val.

Regards
Michael