Owner Builder

[Chomp]

I have the plans drawn up and submitted to council for planning approval. Called the mortgage broker to arrange pre approval before I go ahead with the construction drawings and submission.

He has told me that the bank will not go over a 60% lend as I am an owner builder. I am however a registered builder, I could, but dont want to go through the building company I work for as this will tie me to them.

60% is very tight with my calculations and might not go through any suggestions?

chomp

 

[D.T.]

What are the downfalls of putting down the company you work for as the builder? You'd be able to get in on the deal with a lot less of your own money.

 

[Mamaof3]

i believe you can get a higher LVR than 60 if you're the licensed builder yourself but i can't remember who with....i'll try to find out and will post details but from memory it wasn't with one of the big 4's

 

[Chomp]

What are the downfalls of putting down the company you work for as the builder? You'd be able to get in on the deal with a lot less of your own money.[/QUOTE

Not willing to go down that road, as you say I will be using their money and money doesnt come free. Plus I dont want to rely on other people so I can do this, besides the bank, I want total responsebility.

 

[Propertunity]

He has told me that the bank will not go over a 60% lend as I am an owner builder.

Banks just don't like OBs. Mostly they get the trades out of sequence, overrun their budgets, have subbies leave them 1/2 way through because they want them to fix stuff that was the OBs fault in the first place, change their mind on the specs and so on.

Banks are merely trying to end up with a product that they are happy to have lent the $ on. That is why they prefer licenced builders that provide quotes and sign contracts and have insurances in place.

I don't know if you'll get better than 60% - but perhaps a MB can assist here.

 

[Chomp]

Yes I understand this but I am a registered builder, which is why it doesnt make sense.

 

[Propertunity]

Yes I understand this but I am a registered builder, which is why it doesnt make sense.

They probably don't have an option to tick on their computer screen for "OB is also a RB"

 

[tobe]

Your pushing it uphill. Either swallow the larger deposit required, or swallow the profit premium the builder will sting you for guaranteeing a fixed price contract.

 

[Chomp]

ha ha yeah, outside their scope of common sense.

Think it may have to be larger deposit.

 

[Rolf Latham]

rb as ob is actually scarier for most lenders.....

I know thats odd, but they think u are a developer doing a speccy with ur own labour to move on.



ta
rlf

 

[Chomp]

So Rolf should I not tell them Im registered, I havent submitted the application yet, just been talking with my broker.

 

[Rolf Latham]

gte back to u tommorow

I have an iron in the fire which might help ur broker get across the line with a slightly higher lvr

Owner occ u are building ?

ta
rolf

 

[Chomp]

I will pm you tmrw Rolf cheers.

Chomp

 

[tubs]

To what extent are you a registered builder? Do you have your own building business, or is it just certification that you can.

It may come down to a building business having all the right insurances etc.

 

[Chomp]

Tubs, my licence has no limit to what I can build, no I dont have a construction company. I still need to get all the insurances even if I owner build.

Chomp

 

[Steve Fitz]

Chomp - in my experience if you try to build by nominating you as the registered builder (not the owner builder option) the banks also won't lend you the money.

If you had a building company where you are the nominated supervisor then you write the contracts under that building company and the banks are happy chappies.

 

[bcoombs]

I done a couple of these previously. Must be full doc, you must have site supervisor license and you have said you can get all the insurances, home owners warranty? etc. Should be do-able.

 

[Spectre]

we had one here in qld and somewhere along the line the bank (cba) did a title search and found out that the builder was an OB after the OB ran out of money. That being said the OB wasnt a RB.

OB had to engage a licenced builder to finish it off & to get the rest of the $ approved.

Couldnt pull him to a new lender either without incurring $20k in break fees on a fixed

 

[Chomp]

My mortgage broker managed to find a couple of banks that are willing to go to 75% LVR which is pretty good I think (Thanks Rolf for you help as well), they also want me to have 20% of the build cost available for the construction, no problem.

However the banks wont value the rear block separately until subdivision is complete which is going to set me back a few months. I wasnt aware they do this but it makes sense, something for potential developers to keep in mind.

Chomp

 

[Aaron Sice]

However the banks wont value the rear block separately until subdivision is complete which is going to set me back a few months. I wasnt aware they do this but it makes sense, something for potential developers to keep in mind.
Chomp

this bit does make sense though, you must admit.

lines on paper mean nothing unless there's an official "certificate of title" at the top of the page.