Building a single storey Clarendon home
OK, our application for a construction loan was lodged with homeside/NAB on Friday 10th Oct 2014. Since that was a Friday, we hoped we should have something by end of next week. It was my folly. Since I don’t know much about finance industry and banks, I wasn’t aware of the steps that they go through before okaying a construction loan. Mind you, we had applied for a land loan earlier through NAB and there weren’t any issues at all.
So on Monday 13th Oct 2014 I got an SMS from a UK number that a valuer has been appointed and I should receive a call soon. NAB use CBRE for their valuations. By Wednesday I didn’t get any calls, so I got onto CBRE website and found a 1300 number for residential valuations. I called that number, left a message and got a callback within half an hour. I explained my case to the lady and she told me they are still awaiting on some documents. I promptly emailed the required documents back to them. Basically the documents they required were the detailed quotes from Kitchens, AC, electrical, flooring (we are tiling all common areas via Clarendon). Whew ! The detail they go into….. Thinking that it should be all done and dusted by Friday, I was again wrong.
Next day on Thursday 16th Oct around midday I got a call from the CBRE valuer herself who wanted to know why there was no flooring quote for bedrooms. I told her we will be doing it post handover. She said that was the last thing she required and would be submitting her report by COB Thursday. I was again amazed at the detail they go into.
Its not over yet, folks !!
Later that Thursday afternoon, I also received an email from the broker saying that the bank (NAB) is not happy with Clarendon’s progress payment schedule and they want it modified. NAB viewed them as too frontloaded and not in line with industry standard. I though, “What now ! Another hiccup”. So I forwarded that email to our CSC at Clarendon and good on her, she replied to the bank by 8:30am next morning (and CC’ed me the email). She attached a letter from HIA to her email which basically says that NSW doesn’t have an industry-standard progress payment schedule. Victoria does have one and I believe NAB is located in Victoria, hence they were judging our application by that standard.
I have attached that letter (see below) and if you need it, just forward to your bank as well !
Next day, Friday 17 Oct 2014, I called the number in the email I had received from NAB and talked to the guy who had objected to the progress payments. I was so relieved when he said they are going to overlook that now and will be proceeding with Clarendon’s payment schedule. But then he also said they are awaiting something from the valuer, again! What they wanted this time was a record of comparable sales in the area. I don’t know why the valuer hadn’t included it in the initial report in the first place. So I call the valuer again and she said she had already uploaded it to ValEx system. I tried all day Friday but could not get back to the guy from NAB. So now we will wait and see what Monday brings to us ……..
Construction Loan finally approved on Monday Oct 20, 2014
Click here to download HIA letter when Banks dispute Payment Schedule [PDF]