Losing job even though construction loan has been approved.

Hi guys, our construction loan for a two townhouse development is about to be approved for $1.2M, but there a few structural changes happening at work and there is a possibility I will lose my job(I am a high earner). My question is once the loan is approved and I lose my job midway or even worse at the start of construction, can the bank cease the loan and stop making payments to the builder? Assuming I do lose my job, but I can still make the repayments(have a healthy cash balance in bank and my wife works part time), can the bank put a freeze on providing us with money?

Thanks.

 

As long as you are making repayments they'd have no reason to stop making payments to the builder. They won't do an employment check after settlement.

Carefully consider your own situation though 'if' you lose your job - you don't want to be getting in over your head.

 

Thanks Jess. Luckily, I have a few IP's that I can sell should things go pear shaped. Rule #1 - Always have a backup plan!

 

Is your salary being deposited into an account with a different bank? Otherwise they might notice if funds stop coming in.

 

Never ever heard of this happening and find it extremely unlikely banks would ever check this.

 

They do and it does.

Most lenders have random audits on files between FA and settlement.

I had my first approval pulled recently. Big bank hadn't checked their own records well enough and it turned out this client had defaulted on a student credit card 6 years earlier. Found at audit, approval turns to decline.

 

No I get that. I was referring to once the loan has settled.

 

Agree with @tobe
Non disclosure of existing liabilities is a big one too!
Can pull approval right up until settlement occurs.
The only difference slightly with this scenario I guess is if it gets to the point where funds are drawn because it’s doubtful any lender would want a partially complete security at any stage.