After buying our block of land in January we will finally own it on Friday. We've been talking over the last week about whether or not we should delay the build until after we sell our curent house because we have to borrow more than 80% of the cost and the bank wants to charge us around $19,000 in mortgage insurance.
The bank will only value our land at what we paid for it back in January despite the fact that you try and buy a block of similar size to ours on the estate now, you'd be paying at least $50k more. And to add insult to injury they are only valuing our build at $30k less than what it is costing us. The problem is they don't look at the plans they base the entire assessment on the price per square meter for a built house in the same suburb have been going for recently. That's despite the fact that there are many houses bigger and more expensive than ours being built in the same estate now. No wonder these pricks made $5 billion profit this year.
So the bank wants me to pay insurance for them in the event that I renege on the loan and the house is worth less than what is owed on it they can claim on that insurance. Not me - I can't claim, even though I'm paying for it. How does that work? Never mind that since I bought my first home in 1982 I have never been late on a payment, not once.
What a rort. I understand why the bank needs to protect themselves but why do I have to pay a premium for insurance when in three months time I'd be under the limit anyway? Any bankers out there please explain.
Anyway - delaying the build would mean we'll have to rent somewhere, which means moving twice and probably also having to put stuff in storage. We'd have to find a place that would let us bring our dogs and it's just too much of a friggin pain in the arse to go that way. So we'll pay the bloody insurance and get the place built so we can move in and enjoy it.
On a much more pleasant note, thanks to the wonders of the internet, we have met a number of our new neighbours already and we're both really looking forward to moving into the area and putting down new roots.
My lady is keeping the entire house building saga up to date on her blog Destination 3977 so please feel free to pop in and say hello.