Payment schedule for construction loan

Discussion in 'Loans & Mortgage Brokers' started by Louis XIII, 20th Jul, 2015.

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  1. Louis XIII

    Louis XIII Active Member

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    Hi all,

    Can someone please answer the following question.

    If I have a construction loan of 700K, though total build cost is 770K, when would the bank expect me to put in the shortfall of 70K.

    Would it be straight off the bat, as in the deposit and part of 1st progress payment, or could it be delayed till the final payment?
     
    Louis XIII, 20th Jul, 2015
    #1
  2. 380

    380 Well-Known Member

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    Most likely, bank would want your to put your money first .

    So 1st payment of 5% deposit
    And part of second payment stage.
     
    380, 20th Jul, 2015
    #2
  3. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    Generally they want you to put your money in first
     
    Westminster, 20th Jul, 2015
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  4. Louis XIII

    Louis XIII Active Member

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    Thank you Be Developer and Westminster, much appreciated. :)
     
    Louis XIII, 20th Jul, 2015
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  5. MRO

    MRO Well-Known Member

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    Has the bank just lent you the GST exclusive value of the contract?
    They know you can claim back the GST so let you pay that component and get it back from the ATO each month/quarter.
     
    MRO, 20th Jul, 2015
    #5
  6. Louis XIII

    Louis XIII Active Member

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    No unfortunately the Val's didn't stack up, so I had to come up with the shortfall, but will refinance once complete.
     
    Louis XIII, 20th Jul, 2015
    #6
  7. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    You contribute your money first - the bank ain't putting up a cent until your contribution has been met.

    Cheers

    Jamie
     
    Jamie Moore, 20th Jul, 2015
    #7
  8. Louis XIII

    Louis XIII Active Member

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    Thanks Jamie, I had a feeling that would be the case, just wanted to find out if there was a way around it, but obviously not.
     
    Louis XIII, 21st Jul, 2015
    #8