Construction loan with 88% LVR

Hello All,
Sorry for the long post.

I came here for your inputs on the trouble I have to get a construction loan with 88%LVR in NAB.

Here is my situation

1. Bought a land with 90%LVR last year June 2020.
2. with saved deposit + Increase in land valuation I applied to a construction loan with 88%LVR

But my agent mentions that NAB system is getting my application rejected even if the credit assesor is happy to approve it. He mention that if we have 85% LVR we have a possibility to get it approved.

But to have that 85% I need to save another 30K, which I will have to wait for 5-6 months.

Borrowing capacity is not an issue as we are well within the limit.

Can any one suggest is 88%LVR not enough to get the construction loan approved ? I am seeing people with 90-95% getting approved.

Is option of moving the loan entirely to another bank make sense ? (LMI will be lost).

Inputs are much appreciated.

 

What is the problem. Is valuation coming in low or are there LVR restrictions because of the area?

 

My borker mentions that NAB is not saying any specific reason. NAB system is not approving it but the credit assessor is fine with my deposit and borrowing capacity.

The valuation came 100K more than we bought 7 months ago and if I include the increased valuation + deposit I have the LVR was 88%. I am building in Kellyville not sure if there is any LVR restriction in that area.

 

That doesn't seem to make sense to me.

 

Exactly. I am hearing people borrowing with 90-95LVR. Our borrowing capacity is good. I am not sure if I have to change my broker or bank. Broker was good when I was getting my land loan with him. I trust him but this seems so weird to me. Do I need to check with NAB seperatly ?

 

NAB use credit scoring models and rely on this heavily. It is harsh for single applicants, above 80%. Add in construction and it’s something the system may not like so much. If the system says no it’s hard to override without a very strong reason.

 

Thank you.. Redom. This is what my agent is saying. But what are my options both of us are working 200k+ annual salary. What reasons I can give ?

 

A little odd, but if its a system decline then there's not much you can do as its hard to override, especially in LMI territory.

I think youre better of going to another lender. Obviously not CBA since they have a 30 day turnaround time.

Would suggest ordering a few valuations with your broker and try to obtain the highest valuation.