AIB refusing to allow drawdown of stage payment for Selfbuild

Baltrasna2013

AIB are refusing to allow me to drawdown mortgage funds for stage payments until all my own savings are used up. My approval expires end of July so I will have to reapply for mortgage at that stage if I am not allowed drawdown my funds.

If all my own funds are used up I will not have money for house decoration furniture etc.. The bigger hassle is reapplying for mortgage approval.

Has anyone else had this experience. Is there a way that AIB will allow mortgage drawdown if ones own savings have not been used up.

killers1

Baltrasna2013 wrote: »

AIB are refusing to allow me to drawdown mortgage funds for stage payments until all my own savings are used up. My approval expires end of July so I will have to reapply for mortgage at that stage if I am not allowed drawdown my funds.

If all my own funds are used up I will not have money for house decoration furniture etc.. The bigger hassle is reapplying for mortgage approval.

Has anyone else had this experience. Is there a way that AIB will allow mortgage drawdown if ones own savings have not been used up.

What stage are you at? Have you tried to drawdown funds? i.e have you sent in a an Architect Cert confirming value of works to date? What exactly did the loan offer condition in relation to use of own funds first state?

Baltrasna2013

1st stage cert issued by certifying engineer to bank for value of foundations. Bank have contacted us by phone to tell us we must use all our savings first. Contract did say we must use our own funds first but in the same paragraph it said we could draw down mortgage "in tandem" with using our own funds. Solicitor says where there is an ambiguity like this the favour should fall on the side of the consumer .

killers1

Baltrasna2013 wrote: »

1st stage cert issued by certifying engineer to bank for value of foundations. Bank have contacted us by phone to tell us we must use all our savings first. Contract did say we must use our own funds first but in the same paragraph it said we could draw down mortgage "in tandem" with using our own funds. Solicitor says where there is an ambiguity like this the favour should fall on the side of the consumer .

AIB won't be looking for you to use 'all' your savings. It's whatever you proposed on the application that you were going to use towards the build cost. What's happened here (E.G) is that your Architect has confirmed 'works to date' are valued @ €20k.. Your solicitor has then tried to drawdown €20k. The bank will see that you have put nothing towards the works and that's why they won't release the stage. You just need to talk to your Architect. The value of works to date will need to exceed the amount you are requesting by the amount you are supposed to be putting towards the works.

Baltrasna2013

It's just my contribution towards build will get me to roof level which will not happen until end of oct..My approval expires end of July therefore according to Aib I will have to apply for mortgage again to drawdown in November. Also i will not have money to pay contractprs for first fix as I will have used all my money to get to roof level. No one will do much beyond 7000 euro without getting paid.the amount which I said I was putting into the build happens to be the same as what I have on savings. From a cash flow point of view I will get stuck after roof stage unless the bank allows me to draw down my mortgage in tandem with using my own funds. It would be much easier for me if they allow me use mortgage in tandem with my own funds. This would avoid reapplying and cash flow problem. The contract says I can do this but it also says I must use my own funds first. One statement is a contradiction of the other.

killers1

Baltrasna2013 wrote: »

It's just my contribution towards build will get me to roof level which will not happen until end of oct..My approval expires end of July therefore according to Aib I will have to apply for mortgage again to drawdown in November. Also i will not have money to pay contractprs for first fix as I will have used all my money to get to roof level. No one will do much beyond 7000 euro without getting paid.the amount which I said I was putting into the build happens to be the same as what I have on savings. From a cash flow point of view I will get stuck after roof stage unless the bank allows me to draw down my mortgage in tandem with using my own funds. It would be much easier for me if they allow me use mortgage in tandem with my own funds. This would avoid reapplying and cash flow problem. The contract says I can do this but it also says I must use my own funds first. One statement is a contradiction of the other.

Did you apply to drawdown the total of the value of works to date? If so, try to ask for a lessor amount where you have contributed something to the costs to date I.e you have used your funds in tandem with the banks and see if they'll release monies. The bank won't want you to run out of funds and be unable to pay contractors.

Baltrasna2013

Thanks killers, I am meeting bank tomorrow so I will suggest that to them. However they do seem a bit inflexible. I will let you know how I get on.

killers1

Baltrasna2013 wrote: »

Thanks killers, I am meeting bank tomorrow so I will suggest that to them. However they do seem a bit inflexible. I will let you know how I get on.

The problem you'll have is that the person you're meeting will have no say in the decision. Tell them that you have €X amount to put towards the build that you intend to use in tandem with the Bank's funds as per the conditions specified in your loan offer. Explain that if all your funds are used up front you will not be in a position to complete the build and the bank will be faced with a half completed property. Ask them for their proposals on how you can complete the build if they are not going to honour the conditions set out in the legal loan offer. I'm pretty sure a compromise can be reached and it's just a case of working closely with your Architect in relation to the figures.

Baltrasna2013

Thanks killers, the person on the bank does seem to be more like a go between. I agree they will need to explain how the project can be completed if they are not to stick to the terms of their legally binding contract.

poldenais

Hi All,
I'm running into the same problem now. AIB have it in their Terms & Conditions that 10K must be used of my own money before the first drawdown...I didnt even know this until my Solicitor told me.my arch put in the first cert not allowing for the 10K and they have come back now saying its wrong.

Question is: so I tell the arch to put on 10K on to the works carried out but do the bank then request evidence on this payment or how does it work. Do they check my accounts or what. I need the first stage payment in soon now.

thanks,

killers1

poldenais wrote: »

Hi All,
I'm running into the same problem now. AIB have it in their Terms & Conditions that 10K must be used of my own money before the first drawdown...I didnt even know this until my Solicitor told me.my arch put in the first cert not allowing for the 10K and they have come back now saying its wrong.

Question is: so I tell the arch to put on 10K on to the works carried out but do the bank then request evidence on this payment or how does it work. Do they check my accounts or what. I need the first stage payment in soon now.

thanks,

The Bank won't look for any evidence of the money you have spent and their refusal to advance the monies is based solely on your architects cert. If the Architect is saying the value of works to date is €20k and you are looking to drawdown €20k then it's obvious to the bank that you haven't put anything into the works so far. If your architects cert states the value of works to date is €30k and you are looking for €20k the bank will have no issue whatsoever releasing the monies.