Hi. It's my first time getting a home loan. I have been quoted a $1500 construction admin fee in the loan documents (yet to sign). Is this how high the lenders charge? My loan amount is $480k.
Construction Administration Fee of $1500 from Macquarie?
zeoko on 28/09/2022 - 21:24
Last edited 29/09/2022 - 12:02 by 1 other user
Last edited 29/09/2022 - 12:02 by 1 other user
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It's by the bank. Want to know if this is usually this high or is special with Macquarie.
Google got me this https://www.macquarie.com.au/help/personal/home-loans/applyi…
Look like it's a standard fee for Macquarie for construction loans.
Thanks! Didn't see this during my Google search. Will see if other lenders have similar fees.
Check out the fees in your loan document you signed with Macquarie as it will be in there along with other fees that will be charging you over time.
This fee is to pay the quantity surveyor to do progress payment inspections and reports before the bank releases the money for the works completed on the new construction. They have to check the value of the asset so they are never in a position where bank would be exposed to a potential loss.
^This but I don't think it's all just for the QS.
And the valuer and some for the bank
This is standard with Macquarie.
Macquarie or your broker should have made you aware of this.
I have worked for a big 4 and a smaller bank and generally construction loans have had a $100 construction fee on top of the application, document prep and settlement fees (approx $500 in total). There is also a Full Valuation fee (generally between $250 - $550 depending on the location) plus 2 x progress inspection fees of around $110 each…so basically all up between approx $1000 and $1400 in total fees.
A $1500 construction admin fee seems reasonable considering the work that goes into a construction loan assuming there were no other application fees charged?
The total fees are coming to be more than $2500 with them and major is the construction administration fee.
How many progress payments does your builder want? Each one will require inspection before payment to builder, and that will eat up the majority of that fee. There will be an admin fee included in that, to cover the additional cost of administration to the bank.
So if you have a deposit and five further stage payments, you will pay for initial as-if-complete valuation, all the interim stages and then the final on comp val. A total of six inspections plus the admin on top? The inspection costs can vary depending on both location, value of property and type eg if you're building a duplex pair the valuation will be a lot more expensive, and properties over $1m cost more too. I don't think you're being ripped off. $1500 is in the upper ranges of reasonable for a standard project home in the burbs, but still reasonable.Thanks! The total fees including the construction admin is a bit over $2500. Is this how much people pay as fees?
Depends - are you including the listed government charges eg mortgage registration, title search etc in with those "fees"? You will pay those regardless of where you borrow. Most banks have at least an application fee, possibly a settlement fee, and they can all differ. These are on top of the construction fees.
Why did you wait until after you got the loan to start enquiring about fees?
I haven't signed the loan documents yet. Got them yesterday and will speak to my broker today.
I pushed back on QS reports, and were subsequently not required. We ended up paying $300 with Westpac for $900K loan for two townhouses started in December 2019. This included valuers visit before the final payment. Westpac's construction loan rate was also pegged at the same rate as the investor rates. Build took 18 months from the first draw. However, no extra charges were levied. Most banks were quoting higher interest rates for construction loans.
I would suggest it is probably worth checking with other lenders.Thanks! Will discuss with my broker.
Charged by the bank or the builder?
If its bank, check with the bank otherwise check with the conveyancer.