Construction Finance Question

Hi All,
Just a question regarding finance on construction. When a valuer looks at the fixed price build contract do they identify missing things such as driveways and require you have enough available funds to pay for this before lending?

Example - Say I have a fixed price build contract for 300k but missing is a driveway, say the driveway would cost 20k

Would the valuer look at the contract and say you need it added into the contract, or would they say you need to have enough available funds in your savings or would they not care??

 

yes

 

To which part

 

No, the valuer may mention it in their report.

The assessor will also look through the plans and anything missing is likely to flag a question.

Under 80% it's unlikely to be an issue. Above and you may have to show either or both the funds to complete the build and or a quote or invoice for the required works.

At one stage BankWest got window treatments in their bonnet. It was really painful as most builders don't do curtains and valuers wouldn't always include the value in the report. Really difficult for fhbs without much deposit.

 

I just did a construction loan with Bankwest and they wanted quotes for curtains, drive ways, fencing, landscaping etc.

Need to have enough funds for these if they are not in the contract.

 

You don't need non essential works on the contract - but this can negatively affect the valuation.

Dependent on the lender they may or may not require you to show the capability to fund those works from your cash - generally not.

 

Thanks all for the great responses. Sounds like it is somewhat a grey area for the various lenders and that Bankwest are not great for construction!

 

Bankwest are very good for construction. The just have a thing about curtains.

 

Take too many loans at Bankwest and your borrowing capacity will be curtains

 

haha we really not an emoticon for a drum roll