Forums / Getting Technical / Finance / Bank refusing to allow or accept a revaluation of my property

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  • Profile photo of Matt007Matt007
    Member
    @matt007
    Join Date: 2008
    Post Count: 259

    I asked Adelaide Bank to revalue my property, as it hasn't been done for about 4 years, and I know it's increased enough to bring my LVR to 80% or below. I didn't ask to increase my loan amount, just to have the property revalued at today's current prices rather than early 2007. I wanted to get the LVR down to get rid of LMI or any influence they have over my account.

    This is what I got back:
    While your home may have appreciated since originally valued, there remains the chance that over the future course of the loan, the value may reduce again due to adverse economic circumstances etc. For this reason, once the Bank holds lenders’ mortgage insurance, it will be retained for the term of the current loans. At some point the exposure may increase to above 80% again. Should you wish to independently have your property revalued, that is up to you.

    Please note that any valuation commissioned by you would generally not be accepted or used by the Bank.

    <moderator: delete language>

    Profile photo of MarJacMarJac
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    @marjac
    Join Date: 2010
    Post Count: 71

    First of all LMI doesn't really have any influence over your loan (except in a default situation), you've already paid the premium which covers the Bank for the term of the loan
    The loan is already over 2 years old so little possibility of any partial refund of the premium paid, refunds are usually (depending on insurer and Bank) are only paid wiithin the first 2 years if the loan is paidout i.e. not having security increase in value or loan amount reduced.

    Second the Bank will have its own Panel of Valuers which will conduct valuations "for Mortgage purposes" which may not reflect actual market value (often a conservative M/V) therefore will not accept a valuation report not requested by the Bank

    Not really a massive load of anything ;-) 

    Profile photo of Matt007Matt007
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    @matt007
    Join Date: 2008
    Post Count: 259

    Pigs ar*e. It sounds like weasel words to me. I know they have panel valuers and requested one to conduct the val.

    I have never before heard of a bank refusing to allow someone to revalue their home to reflect current market prices. Just comes across very much like they're trying to avoid something that may put me in a stronger position than I'm in currently. Do they even have the right to refuse this? Or is this a matter for the Ombudsman.

    Anyone else?

    Profile photo of No1No1
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    @no1
    Join Date: 2010
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    They have no need to revalue unless you are borrowing more money. It will make no difference to the loan as it is already mortgage insured regardless of current value.

    Even if they did get a new valuation for legal reasons they are not generally allowed to give them to customers. Therefore a pointless exercise.

    Profile photo of Jamie MooreJamie Moore
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    @jamie-m
    Join Date: 2010
    Post Count: 5,069
    No1 wrote:
    They have no need to revalue unless you are borrowing more money. It will make no difference to the loan as it is already mortgage insured regardless of current value.

     Correct.

    Use this website to get a free residex valuation on your property. It won't be as accurate as a physical val but at least you'll get an idea of what your property is worth. This website will give you six free valuations.

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of Jamie MooreJamie Moore
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    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Might help if I post the website – http://www.findmeahome.com.au/

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of TerrywTerryw
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    @terryw
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    Matt

    If you are not happy why not just leave? – probably because of the exit fees? You could at least threaten to leave by requesting a pay out figure.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
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    Profile photo of Limited RecourseLimited Recourse
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    @limited-recourse
    Join Date: 2010
    Post Count: 33

    Matt your getting your knickers in a knot over something that isn't important. Better to expend your energy on acquiring another appreciating asset rather than worrying about what you already achieved. If its your home its not an asset but a liability your paying with income after tax rather than being paid and claiming a deduction on your interest and depreciation.

    Regards NR

    Profile photo of crustycrusty
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    @crusty
    Join Date: 2010
    Post Count: 127

     A home is the most important asset you can have. If its a liability you would sell it.     It can keep you warm, it  can keep you dry , you can store your stuff in it including food  which you can also cook and eat in it, you can be entertained in it, you can even do buisiness in it, including buying and selling things like shares, commodities and property.  If this isnt enough  you can leverage of it   by buying assests that make you wealthy,  and at the same time give you tax deductions so you dont have to pay tax.    NR if your home is a liability  I will take it off your hands and there is no need to pay me.

    Profile photo of luke86luke86
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    @luke86
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    Post Count: 470

    Limted Recourse- I agree with you. I also feel that a home is a liability as it is not income producing. Even though it does increase in value over time (hopefully!!!), it does not put cash in your pocket while at the same time draining your hip pocket with mortgage repayments. But lets not argue on semantics.

    In regards to the original question/comment about banks, then the bank has a good point in this instance. There is no opoint in revaluing if you are not borrowing more money. It is also in their interests to keep the LMI attached to the propoerty in case values plummet so they can sue you to recoup costs in the event of a default.

    Remember that banks exist to protect the interests of their shareholders and customers are just a tool in order to achieve this. If you are not happy, then switch banks and find one that can give you a better deal.

    Cheers,
    Luke

    Profile photo of aussieguy2000aussieguy2000
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    @aussieguy2000
    Join Date: 2010
    Post Count: 81

    Mortgage Insurance can be partially refunded, though only if the value has been reduced below 80% LVR of the original valuation within the first 12 months of the loan. So you will not be getting any money back, and why would the bank want to cancel the mortgage insurance, if you default, they get paid out and the MI company chases you for the cash, it is detrimental to their business to do otherwise.

    If you still insist on a new valuation, tell them you want to change the loan to an IO or P&I depending on what you currently have, or that you want to extend it by 10k to put a patio out the back. The first thing the bank will do is order a valuation to see if they will allow you to borrow more. Once the valuation is done, tell them not to proceed with the new loan.

    Remember that you will incur the costs of the valuation, and will not get a copy of it, (so other than you paying for the bank to have a new valuation in their file you are achieving nothing). No bank has ever given me a copy of a valuation and I have always requested one in the hope that they may do so (from 6 loans with 5 different lenders) :p

    At the end of the day if what you truly want is a valuation, go order one yourself.

    Profile photo of Mick CMick C
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    @shape
    Join Date: 2010
    Post Count: 1,099
    No1 wrote:
    They have no need to revalue unless you are borrowing more money. It will make no difference to the loan as it is already mortgage insured regardless of current value.

    Even if they did get a new valuation for legal reasons they are not generally allowed to give them to customers. Therefore a pointless exercise.

    Home run!
    ABL see no point in doing the valuation, it won’t change the LMI in fact even if the LVR did drop you will NOT get any refund on the LMI. Also even if they allowed a valuation they will keep it and give you the “value” only and then charge you $280 for it :(

    Also one possibly reason why ABL will not allow you to do the valuation is because 2 of their product is based on LVR, the lower the LVR the lower the rate on a sliding scale….so if your LVR did drop you could potential refinance BACK to them at a lower rate.

    But i have to say a few lenders allow valuation for free ( ANZ allow up to 3 free valuation per year for all their break free customers, regardless of what they do with it) some would be happy to do the valuation if you ask as you can’t use this valuation with any another bank anyway.

    Three possible solution:
    1. Swap to different lender – but get an Upfront valuation done first ( some bank do not charge for valuation, most do)
    2. Ask a broker to do it for you; and pay the $280 ABL valuation fee. – Us brokers have the ability to do upfront valuation if requested.
    3. if you want the valuation for personal reasons, then get your own ordered ( the bank will not accept it though) – either a free desktop one or a full valuation $200-250.

    Regards
    Michael

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
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    Same Banks. Better Rates. Served With a Passion.

    Profile photo of Ron the Mortgage BrokerRon the Mortgage Broker
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    @ron-the-mortgage-broker
    Join Date: 2011
    Post Count: 13
    Matt007 wrote:
    I asked Adelaide Bank to revalue my property, as it hasn't been done for about 4 years, and I know it's increased enough to bring my LVR to 80% or below. I didn't ask to increase my loan amount, just to have the property revalued at today's current prices rather than early 2007. I wanted to get the LVR down to get rid of LMI or any influence they have over my account.

    This is what I got back:
    While your home may have appreciated since originally valued, there remains the chance that over the future course of the loan, the value may reduce again due to adverse economic circumstances etc. For this reason, once the Bank holds lenders’ mortgage insurance, it will be retained for the term of the current loans. At some point the exposure may increase to above 80% again. Should you wish to independently have your property revalued, that is up to you.

    Please note that any valuation commissioned by you would generally not be accepted or used by the Bank.

    <moderator: delete language>

    Hi Matt,

    as stated below, LMI is usually paid upfront for the whole loan term.

    so revaluation of your property will not impact LMI, most likely that you won't get any refund for your LMI.

    However if your loan/property value is 75% after valuation, there is lender who is willing to give you lower interest rate because of lower LVR

    so do your residex report /research and if you think your LVR is 75% or lower, find lender who will give better rate for lower LVR

    No need to pay LMI again as LVR is 75% or lower

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069
    Ron the Mortgage Broker wrote:

    so do your residex report /research and if you think your LVR is 75% or lower, find lender who will give better rate for lower LVR

    You'll also need to factor in the switching costs for leaving. Historically speaking, ABL weren't the cheapest to break away from, so do the math before switching. A small rate decrease may not be worth it.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

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