Unconditional finance? Construction

Discussion in 'Property Finance' started by Andy1234, 9th Nov, 2018.

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  1. Andy1234

    Andy1234 Member

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    Hi,

    just asking on behalf of a friend. Does unconditional finance expire/valuation expire?

    Unconditional finance has been received at the end of September, land is a few weeks from settlement, which is fine.

    But valuation was done prior to approval in late August, I heard they only last 3 months which will be coming up in about 2 weeks.

    So will another valuation be required, or is it fine because the approval went unconditional in late September ?

    A bit confusing I know lol.
     
  2. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

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    Not confusing and common question.

    The answer is that it depends on the lender as some have an expiry on the valuation and some on the approval.

    Which lender is this?
     
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  3. Lindsay_W

    Lindsay_W Well-Known Member

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    Some last 6 months, who's the lender? You're friend should just ask their lender/broker these questions.
    Even if a new valuation is needed, what is the concern?
     
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  4. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Hiya

    The only person who's going to be able to give an accurate response is the one that submitted their loan app.

    Cheers

    Jamie
     
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  5. Andy1234

    Andy1234 Member

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    Hi thanks for your response, they are with Westpac
     
  6. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    @Andy1234 there's possibly a lot more going on than what you've indicated.

    Westpac will honour the valuation for at least 6 months, but they might ask for things like payslips at some point if settlement doesn't take place in a reasonable time frame.

    The other question that comes to mind, is this approval for the land only, or is a fixed price building contract already in place? Without council approve plans and a building contract, there is no guarantee that Westpac (or any bank) will fund the construction of the house. All they've committed to so far is funding the land purchase. Their promise regarding the construction is only a pre-approval for that part which is not a guarantee.

    Unfortunately though, there's nothing that can be done about that scenario with any lender.
     
  7. Andy1234

    Andy1234 Member

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    Hi ,

    The loan was for land and construction, fixed priced signed building contract was part of the loan application and the valuation was done on both at the time
     
  8. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    In that case they probably don't need to worry about anything for about 6 months from the approval date.
     
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  9. Andy1234

    Andy1234 Member

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    Thanks, I appreciate the info.
     
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  10. jazzsidana

    jazzsidana Mortgage Brokers - Investment Savvy Business Member

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    Like @Jamie Moore said, best check with lender/broker once to be 100% sure and to stay out of any trouble..