I have a loan currently for my block of land I purchased, however I have entered a contract with a builder for construction and have gone all the way through up till completing the pre start, everything was going well and we were just waiting on finance to be approved from our lender. The total construction costs for our single story house is just shy of 320k which included around 35k of upgrades (which we have now learnt is quite dear for a single story house in WA) however our lender has said that the valuation for the construction is only being valued at 265k and if we want to go through with it we need to provide a 70k deposit which we dont have. She has stipulated that there is no issue with our land cost and it is 100% to do with the construction costs and she has also got a second valuation done by another valuator. I am wanting to know if building contracts are subject to finance? How can the valuation come back so much less, does this mean we are being ripped of by the builder? We realise we will forfeit our deposit but can they charge us additional costs for terminating the contract even though we can not get finance?