What happens if 2nd valuation is less than 1st?

Misty,

If the current property you’ve bought has been bank valued recently, then the bank probably won’t do another val on it. It depends on how much you want to borrow for your next place. If your LVR is low enough, then you shouldn’t have to worry. In my experience, bank valuations are never usually higher than the property is worth, so perhaps you bought it an an under value price to begin with.

A couple of options to think about. Firstly, you could pump in as much money as you can into your property, to reduce your LVR somewhat, therefore taking the pressure off the valuation. Also, say your new valuation *does* come in lower, at least you’ll know how much money you can borrow, and you may have to just buy a cheaper IP next time.

I too, am getting 2 IP’s revalued currently, and I’m really interested in how that will go- they haven’t been valued before. You can always ring up a local RE to find out how much similar properties to yours have sold for. I find that RE’s are great about that, and they have access to all that info at their fingertips :o)

Good luck with it.

kay henry

Sorry Misty- it’s me again! [blush2]

I just wanted to make a quick comment. RE’s don’t do “valuations”- they do “market appraisals”, which really has no validity. Often RE’s will overvalue your IP so that you might sell with them, although this practice is being more regulated now, and the RE can get in trouble if they give you an overvaluation or an undervaluation, so they’re being more cautious. But never take a market valuation at face value. Often bank valuations will come in at a markedly different price than a market appraisal.

kay henry

Hi, I’m a bank mortgage Valuer. Unfortunately when the market slumps (which is noticibly happening) in Sydney anyway, there is not much you can do if your 2nd valuation comes in less than the 1st. I see it all the time. One word of advice I would give is, when you apply at the bank to refinance, over estimate the value of your IP then cross your fingers that a Valuer gets your valuation and doesn’t know the area and therefore re-values your property a little higher! Besides that, there is not much you can do except hold tight until the market makes an upturn which will happen eventually. I worked through the last recession in 1991 and I promise you, you can’t buy any property at those prices today. The alternative is, you may have negative equity for a while but hang in there things will improve.Good luck.

I beleive it is possible that the bank or lender could ask the borrower to lower the LVR (ie reduce the loan – a margin call). But this is an extreme case and I have never seen it happen.

Terryw
Discover Home Loans
North Sydney
[email protected]

I guess you could kill the 2nd valuer, and that could act a as a warning to the third….

Also you could give a fact sheet to the valuer, that incs. any major new developments and recent sales in your area (of course you might select house sales that just happen to be on the high side).

Rgds.
Lucifer_au

Misty,

If you think a lower val price is possible, consider getting a val done either privately (ie you pay for it, and ensure the valuer is on your lenders panel, so you can use it later), or use another lender than your existing to do the val. (probably still have to pay for the val, but will probably be cheaper than getting one done yourself, because of lenders’ bulk discounts).

At least you’ll then know what val will be and act accordingly. If your existing lender does the val, and it comes in low, kiss goodbye getting a loan from ’em for a long, long time..

theloanarranger

Well if you got what you wanted why not sit on it and reval again in 6 month…you know you’ve got some extra up your sleeve even if the bank doesn’t agree

Perhaps you will next reval with a different lender.

Cheers,

Aceyducey

Hi there all
friends of mine had their 3 properties (2 IP & their home) evaluated and they came very very short (mining town with wild fluctating prices), but because of their existing loan contract the bank couldn’t do anything to them (charge extra $$ or the like). So, if time is of the escence, you need to weigh up the costs to you and your plan.
I am learning that rushing things aint the way to go!! Just ensure that you don’t miss out on the opportunity you want to get.
Cheers
C@T

Pay for another valuation fee, go with a different lender and keep us Valuers in a job !

MIsty, some lenders will increase the loan as long as the title has been transferred to one’s own name.

This means that if the valuer places a higher valuation on the property than the actual purchase price one will be able to increae the loan without incurring the penalty charges you mentioned in your post.

Pisces