Need Advice

My fiance and I have purchased a.block of land in Adelaide currently live and both work in Melbourne. The land recenetly settled in November we have a builder all ready lined up and contracts signed now waiting on the Banks approval for construction - we had pre approval already. Once approved they will then merge the two loans into one. Our bank told us on numerous occasions all they needed was two most recent payslips from our current job and the loan will be processsed. everything was going to plan and the bank knew since January last year (a full 12 months) that we intend to move into the house once built (which is in another state).
Today LMI are requesting they need letters from future employers in Adelaide and start dates or they will not accept our application. They have advised the loan won't be granted unless we supply these letters from employers in the state the house will be built. and didn't once bring up the fact that they require this until we first we heard today after the bank knowing full well for a year we intend to move into this house when construction was complete.

We have secure jobs in Melbourne. We won't move until we have jobs, and construction wont be complete for another six months anyway. Lend is 90.46%. We had pre approval and our lending manager not once mentioned this to us. Our application is sitting with their creditors pending these.letters which we can not supply because we are waiting for a construction completion date before requesting transfers or finding other work.
Any advice greatly appreciated.
 
The person who put this loan through obviously didn't think this one through. A cut and dry way to have made this work would be to put it through as an investment H&L. Fact is if you didn't have a secure role you could find in Adelaide, I'm sure you would remain in Melbourne and rent the property out until you could find stable employment.
 
Sounds like you're off to Adelaide soon :)

You should get acquainted with Corey Batt, he's a Mortgage Broker here who is based in Adelaide who I bet could steer you in the right direction.
 
Agree with Cjay.

Put it up as an IP loan - or use a lender that has authority to approve LMI in house and have your broker confirm with their BDM that the scenario will fly.

Worse case scenerio is that you take your business elsewhere - but note that if you paid LMI on the land you'll have to pay it again.

Also - you'll need to use a lender that uses a different LMI provider. For instance - if the current one uses Genworth then might be best to apply with a QBE backed lender.

Cheers

Jamie
 
Hi all thanks for the replys
I do agree Corey however is it to late to change to an investment loan he has said it would look a little suspisious? I believe it's with there creditors and they picked up this problem before the file went to LMI. Neither of us had any intension to move until stable work was found makes it hard if we don't have a build date.

Jamie I know about having to pay LMI again it's about $3700 for the h&l combined. It seems silly there is no concession for the land LMI since it was only a couple of months ago.
At least if it turns belly up we have other options , builder is getting annoyed wanting approval.

Redom No FHOG for this purchase.

Cheers
 
So do you know 100% if it's with credit assessment, or it's with LMI?

Which lender is this? If the loan is put under a certain LVR, the loan isn't sent to LMI (usually 90%) solving a lot of issues.

If credit assessment is asking this, it may be a case of withdrawing the application, loan writer getting confirmation from lender BDM that this can instead be put through as an investment as that is your intention unless you find a suitable job - then resubmit.

If that pathway cannot be tread (which I don't see as impossible) then it may require going to another lender with a refinance - which isn't desirable as LMI has been paid already.
 
Hi Corey thanks again for the reply
I won't know 100% until I speak to them on Monday it's with the creditors is what I have been told but I sense this may not be true, I have asked to speak to someone much higher up in the bank expecting a call monday. Hopefully there will be a resolution as this is starting to stress Us out.
 
That is pretty bad by your branch lender to not think of this as a potential issue upfront.

I would be pushing to do as investment and state that it was a misunderstanding and your long term intention is to live in it but short term you will rent it out. Perhaps arrange your own rental appraisal letter and write a letter to the bank informing them of your intentions to rent out initially.

If that fails you will have to go with another lenders/ another lmi provider.
 
I doubt changing to investment will work, as the OP will most likely need the FHOG and or stamp duty concessions for funds to complete.

Its an awful pickle really, and this is why I always suggest doing construction loans as one transaction. Never settle, or even go unconditional on the land until you have full approval for the build.

I know its not much consolation for the OP. I'd investigate complaining if you had any evidence that provves this was always your intention (pre approval on the build etc).
 
I doubt changing to investment will work, as the OP will most likely need the FHOG and or stamp duty concessions for funds to complete.

Its an awful pickle really, and this is why I always suggest doing construction loans as one transaction. Never settle, or even go unconditional on the land until you have full approval for the build.

I know its not much consolation for the OP. I'd investigate complaining if you had any evidence that provves this was always your intention (pre approval on the build etc).

OP stated FHOG not req'd, and no stamps concessions in SA so they should be in the clear. :)
 
Here's a bit of an update ,

Loan has finally gone through subject to valuation which came back 23k under purchaseetc price another nail in the head, in the process of disputing this and the BM agrees it's is wrong with no ammendments put down ( rain water tank-cessarstone,.900mm appliances etc). It's looks as if we might have to put up with increasing lmi or we start finding another bank that does up front valuations if it can not be challenged? We have asked to see a copy of sales evidence.
 
In my experience the main reason construction loan valuations fall short is the valuer hasnt received all of the construction documents. The full inclusion lists, specs etc.

Ask to get the comments section of the valuation where the valuer explains why the val is short. This will tell you whether or not they have received everything.
 
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