Please, Sir, May I have a loan?

Asking the bank for a home loan couldn't be easier. You just walk in, sit down, and ask. It's the next part that is difficult. The part where the bank's representative looks at you blankly then repeats just one line of your many-worded pitch: "The house isn't complete?".

"How will you service the loan...?"

We were a little naïve because we thought that asking for a loan on an unfinished house would be easier than asking for a loan on land with a view to building a customised home. The problem with an unfinished house is the bank needs to find out what the eventual value of the home will be, and how much you'll need to spend on it in order to move in and get it finished. This may not seem like any of the bank's business at first, but at the back of their mind they're thinking 'how will you service the loan if you're spending your monthly wages on completing the house?'

Get quotes - for everything!

This is, perhaps, where we learned our first lesson on the project. The bank engaged a valuation company to place a value on the incomplete house, and the cost of 'completing' the house.

I honestly do not know how much we'll eventually spend on 'completing' the house. After living in houses for many years I've worked out that there are always things to do to 'improve'. We had already received a verbal estimate of the cost of getting the house to a point where we could move in. That figure was $30k, and included a margin for the 'unseen eventualities'. So we were a little perplexed when the valuation report stated that to complete the house would cost $50k - an extra $20k.

This interested the bank. We then had just five working days to get some quotes from the electrician, and plumber to get the essential work completed. Luckily, we were able to prove that that the work would come in at below $30k. 

This was an important lesson. You see, had we obtained the quotations prior to visiting the bank and asking for the loan, we would not have required the valuation report to include completing the work. This would have saved a lot of last-minute stress and would have reduced the time taken for the status of the loan to be 'unconditional'. This would have brought on an earlier settlement. Those lovely keys would have been in my trembling hand much sooner!