All Topics / Opinionated! / Why can’t we get 100% finance on property

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  • Profile photo of foundationfoundation
    Member
    @foundation
    Join Date: 2005
    Post Count: 1,153
    March 29, 2005 - 9:42 pm

    …which is why I shouldn’t have bothered![wacko]
    Folks don’t want to know why something has happened. It has happened before, therefore it shall continue to happen… ad infinitum. Farewell reason.
    I suppose that prop bought for $22,000 and sold for nearly $250,000 4 years later is proof houses double in price every twelve months. Oh hooray.
    Good luck with your investing Kerwyn.

    Profile photo of ANUBISANUBIS
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    @anubis
    Join Date: 2003
    Post Count: 559
    March 29, 2005 - 11:35 pm
    Originally posted by Brady5:

    Nat R
    Listed price of property is eg $100,000
    Property purchased at $80,000(although bank is not yet advised of this figure)as you want their valuation!!
    Bank valuation returned at $100,000,
    80% LVR on valuation equals $80,000 (full purchase price)
    100% financing.
    (the bank has NO interest in your purchase offer or price, only 80% of valuation..so there is no “lower of” as far as they are concerned)
    Cheers,
    Brady5

    Hi Brady,

    sounds great in theory but every piece of property I have purchased, the bank has taken the purchase price as valuation, no negotiation will be entered into. The bank doesn’t care about how much of a discount you have negotiated – to them what you pay is usually fair value. The val is not done as early in the process as you seem to think.

    Profile photo of kerwynkerwyn
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    @kerwyn
    Join Date: 2004
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    March 30, 2005 - 1:55 am

    Thanks foundation you are a hard person to convince[biggrin]

    Kerwyn

    Profile photo of kerwynkerwyn
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    @kerwyn
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    March 30, 2005 - 1:56 am

    Hi Brady5
    Makes sense if the bank will accept the higher valuation.
    Couldn’t you get an independent valuation preferably before exchanging contracts but once you have the property sewn up. Have it based on the higher value with out disclosing the price you are going to pay for it. If you use one of the banks accredited valuers they would have to accept the valuation, one would think. Not sure if it would work but maybe someone could clarify this.
    Kerwyn

    Profile photo of ANUBISANUBIS
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    @anubis
    Join Date: 2003
    Post Count: 559
    March 30, 2005 - 2:15 am

    In theory Kerwyn – yes. In practice – no.

    Profile photo of Nat RNat R
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    @nat-r
    Join Date: 2004
    Post Count: 224
    March 30, 2005 - 2:52 am

    I was looking at some “actual” underwriting criteria today and the wording regarding valuation is very clear and says “the lower of valuation or purchase price”

    Profile photo of PropertyGuruPropertyGuru
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    @propertyguru
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    March 30, 2005 - 4:22 am

    As most of the people saying above bank accept lower value of contract or valuation price. but you can revalue with some banks very soon and get extra money if they value it higher.

    Cheers
    PropertyGuRu [sultan]
    Mortgage Consultant
    [email protected]
    MSN ID: amitash, Yahoo Id: bornguru

    NZ loan pre approval from OZ in 48 hours

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