Hi All,
We are looking at purchasing a property with a very run down interior (ie not a wall without multiple holes, blood stains on the carpet etc). It is going to auction and we would like to purchase it on a 95% loan. Our broker is a little concerned on what will happen with an onsite val. If it isn't approved due to the buildings current state, we will have to go to an 80% loan which normally would not be an onsite val, but due to the previous decline may turn into one.
What are peoples experiences with an onsite val on a deteriorated property and what can we do to improve our case? BTW we would not be paying above market value for the type of property.
Thanks in advance
Unfortunatly that is a risk at 95% lend. You could get it valued before auction however this will be your max e.g. The bank will take the lower of purchase price or Val: – if you buy higher at auction you might only get 95% of the valuation already done.
Depending on the lender you might be able to order and pay for your own valuation.
Which lender are you using?
Thanks Banker. Most likely Bankwest at the moment. We were considering doing our own val, to confirm our research. I was unaware that you can get a bank val prior to auction, definitely worth considering. Are there any additional risks to this method that we should be aware of?
You cant just pick a valuer or the bank might non accept the valuation. ANZ use to let brokers order valuations before submitting a deal. I don’t know if they still do.
CBA allow you to order your own (if you pay for it) via their website – you don’t even need to be a customer.
With CBA it automatically selects a valuer after you’ve orderred it. If you use another valuer from their panel it can not be used (must be the specific valuer from their computers random selection). This is to stop bankers and brokers getting too close to certain valuers and having potential to influence the figure. If you do use a CBA website orderred bal it comes back to you: not the bank. You can then submit it with your application and it will be accepted.
BankWest can be a little unpredictable – they’ve always had processing problems and don’t (as far as I am aware) approve the mortgage insurance.
Are you using a broker or going direct?
We were thinking of doing our own val just for a little bit of reasurance that we were not completely off the mark. We are using a broker and apparently ANZ are not doing 95% on IP's at the moment. Will have to check on CBA, might approach them directly
Yes Anz do allow Brokers to order valuations prior to submitting the deal.
Richard Taylor | Australia's leading private lender
I had a client with Bankwest last year applying for less than 80% lend. The valuer made some silly comments about the condition of the property and the bank would not lend for it at all. So even though the value may come in you can still get rejected if there are comments about it being in poor condition etc. The higher the LVR the more concerned they will be.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
CBA only do owner occ at 95%. investment is 90%. unless you are premium or private banking.
Try NAB they will lend 95% on investment, no postcode restrictions and internal vals which are usually a drive-by. 9 out of 10 of our deals are valued as contract price…
Trent – NAB 95% lvr is only available if you are a 4 star Broker and Kellie's Broker may not be.
Richard Taylor | Australia's leading private lender
And they decline nearly every 95%er… Maybe no post code restrictions however the traditional NAB decline based on 'where not comfortable with the deal" can be used to decide anything.
Must admit never had a 95% lvr declined with NAB and i have done them in many a regional and rural town.
Agree of course that all comes to the actual deal itself. Maybe we just whittle out the chaff before we submit them.
Richard Taylor | Australia's leading private lender
The property that we are looking at is in metro Melb. I will however talk to our broker about NAB, he has spoken to me about an option with Homeside who is backed by NAB……….
This is our first purchase, so nervous about the 'what ifs'
I’d just work out the max you can spend / or are willing to bid. Get the bank to value with that as your estimate and when the Val comes back get confirmation from the bank it acceptable: and let the Val be your limit.
As Richard said, good brokers weed out the chaff. If you buy, then get the val, then fin out the bank won’t accept it, the find out your are the chaff;; you will be in a bit of a pickle…
Richard, agreed and also if you have a direct relationship with the bank.
Also agree with the 95% LVR having no issues with the deals. They have to be strong servicing deal though before the bank will sign off on them!
Cheers,
Thanks all for your comments, we have decided that it is not worth the risk to purchase this property at auction. The valuation or serviceability is not our concern. It is obtaining the LMI approval, when the property interior is in need of a lot of repairs and cosmetic renovation. Who knows it might not sell and we can jump on it………………
BTW Richard what do you mean when you said 'whittle out the chaff'?
Thanks
Banker what is the price of the CBA Val if you order it online?
I’m not sure. I think between $180 and $250 for a normal Val. The link is a but hard to find.
Geez thats not to bad.
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