First Home Buyers FAQ Covid-19
Will my settlement date be impacted by COVID-19?
There is the possibility that settlement dates may be delayed due to possible reduction in resources and people required to get your land ready for settlement. This may vary from council to council.
What are FinancePath going to do about this?
1. Your credit advisor is requesting updated settlement dates from your developers and Metricon Sales Consultants.
2. We will then communicate these dates to yourself and your conveyancer with a request to extend your finance clause 2 months prior to the anticipated settlement date.
For example, if settlement is expected on the 1st October we will request a finance clause (when you must obtain unconditional loan approval by) for the 1st August.
We will ensure all relevant parties including your Metricon Sales Consultant is copied in on this communication.
We will endeavour to have these tasks completed prior to Easter.
I have signed a land contract and my income has been reduced or I have lost my job. What should I do?
We understand why you would be concerned. It is totally normal. Understand that your Metricon Sales Consultant, Savings Coach and your FinancePath Credit Advisor are here to ensure that your dream of building your home remains a possibility.
You can take control by calling your Credit Advisor and letting them know what your new income level is and what conditions of your Loan Proposal Certificate (LPC) you are concerned you may not be able to meet.
What are FinancePath going to do with this information?
1. We will review this information and the impact on your ability to be approved for finance and/or whether timeframes need to be adjusted.
2. We will then communicate that to yourself, your conveyancer and your Home Sales Consultant so that discussions can be had with Land agents to investigate your options.
If finance has not been able to be obtained up until the date of your finance clause you retain the right to withdraw from the contract.
We will work to have your loan approved prior to the finance clause. Your conveyancer will liaise with us to ensure this happens and if not possible either request a further extension.
I have signed a land contract and I am worried about losing my job? What should I do?
Everyone can only act with the facts they have in front of them. We understand the concern caused by the current uncertainty.
As circumstances are changing daily our recommendation is that 1 month out from your finance clause expiry, we review your financial position.
At that point in time we will ask about the certainty of your income and your confidence in your ability to meet your commitments which will include considering your worst-case scenario.
Our role is to ask the right questions of you to ensure we are not just lending responsibly but also help you make smarter financial decisions and putting you in a better financial position. Your role is to answer them honestly.
What are FinancePath going to do with this information?
1. We will be able to continue with an application for finance or;
2. If we agree that there is too much of a risk in your ability to meet your loan commitments we will again discuss with all parties and see what options exist which may include either extending settlement dates or looking at alternative block options.
Please understand one of the key benefits of building with Metricon, Australia's No. 1 home builder is the relationships they have with land agents and a commitment from all parties to help you achieve your dream of building your first home.
Will the CoronaVirus mean the value of my house and land will decrease?
Possibly. If there is greater supply of land and established homes for sale due to people losing their jobs and putting properties on the market, and the demand to buy isn't as strong then a reduction in value is possible.
Based on the recent valuations which have been conducted for Metricon clients which we are applying for finance now and valuations on the properties have been completed this week, the valuers are making comment to Covid-19 and that it may have an impact on property values, however to this point, the valuations received are coming back on or over the contract price which is good.
There are two things that are important to remember here;
1. The current situation is only temporary. It may not impact on prices at all or it may have an impact for several years. If land prices had been increasing prior to the CoronaVirus then it's likely that over time land prices will increase again.
2. Build costs are unlikely to decrease. If anything they are more likely to increase. So if you are buying this home as a long term investment then it is important to look past short term fluctuations, up or down, and focus on the longer term.
If my property is valued less than what I bought it for when I apply for finance will I still be able to get a loan?
A lower valuation can have an impact on your ability to obtain finance. This is why it is important to have a finance clause in place to protect yourself should it impact on your ability to obtain finance and settle. Should a valuation come in lower there are still a number of options that we can explore which we will step you through if that situation arose.
What happens if I have settled on my land and I lose my job or my income is reduced while my house is getting built?
Your land and construction loan is progressively drawn which means you only pay interest on the amount of money the lender has paid to the builder at each stage of construction. i.e if your loan is at frame stage you would only be paying interest on the cost of the land and slab.
You will only pay interest on the full loan amount on completion.
That said if you are unable to make repayments then the lender can decide to stop paying the required funds to complete the build until the repayments are made up.
This is why we will ensure prior to your finance clause expiring you are comfortable you will be able to meet your commitments in all scenarios including the partial or complete loss of income for a period of time.