Construction Loan

How hard is it to process a construction loan? Apparently it's too hard, signed our contract on 26 Feb 2010 & forwarded the contract to the bank shortly after that & 2 1/2 months later, we still haven't got the loan approved.

Firstly they asked for Council Approved Plans, which PD won't provide because it's not their policy to apply for Council approval more than few weeks before they are going to start building. Finally managed to get the bank base the loan not on the council approved plans. Valuation was done & the figure was conservative but more than enough for us to get our loan.

Then in mid April they asked for the last 2 payslips because those we provided in Feb were deemed to be obsolete.... if only they process the loan faster, then it wouldn't be obsolete.

Then they asked us to give them written quotation for driveway, fencing & landscaping. The only problem is the house is not there yet, how do you expect us to get quotation for something that is not there. We do have side & back fences & there's no council requirement that we have to put up a front fence. I finally managed to get a quote for the driveway from one of my clients.

On 4 May 2010, we finally got a conditional approval. The condition is that I need to provide last 3 months confirming salary credits for myself. The thing is, my weekly salary has always been directly credited into my account with the same bank. They can see there's weekly salary that going into the account, yet they still asked me to prove salary credits? Are they dumb or what, it's into your bank!!! Yet they are still not satisfied with that, I've given them my payslips, my group certificate, my superannuation record and a pre filling report from the Tax Office. Just don't understand what else they want from me :(

6 May 2010 the bank said that we've got the loan.... Finally, only took them more than 2 months to process. They said they are going to send out a confirmation letter in the next day or 2.

11 May 2010 the bank said the amount of loan is too much for us.... I'm so ready to switch bank now. Of course the loan amount they have in their file is too much, because that's not the amount we are asking for, we are applying for lower loan than that. They are back to drawing board now, fixing the figures. Hope to hear from them very soon.

If you are wondering which bank it is, it's AMP Bank. The reason we are staying with them is that our current loan is with them & been with them for the last 3 years. They charge us no fees & charges at all plus discounted rates for variable & fixed loans... yes, all without any fees or charges.