95%LVR + quick topup

T

Timocracy

Just found this website - love it - first post.
Looking for some ideas on the best loan available to my situation.

-Buy price is considerably lower then my valuation of median price in block
-Small renovation required
-Would like to re-value and "top-up" back to 95% to get my money back on the renovation/invest in more property ASAP

I'm looking for a 95% lend plus LMI capitalised. I've found combank will do it however their rates are not the best and they require 6 months prior to re-valuation(top-up).

Any ideas? I'd love to see a broker but I live very remote.
 
Other lenders also do 95%+LMI lending...not just comm bank and with no exit fees it is possible to change lenders at each stage
 
G'Day Timocracy

Welcome to the Forum

Hey, we are all remote nowadays - those electronic pigeons make short work of any distances!

95% + LMI would usually require Genuine Savings (5% of the Purchase Price on hand or accumulated over 3 months) but some lenders will do 95% including LMI without Genuine Savings

However, post-settlement is considered to be an Internal Refinance, and refinance is generally limited to 90% + LMI .....

So reimbursing yourself for the cost of the reno may not be possible simply because of the Loan to Value Ratio

However, the main stumbling block is the valuation - if you are just repainting or replacing a couple of kitchen cupboards, what makes you think that a bit of refurbishment would make the property worth $00,000 more than what you paid for it?

Property investing is not a logical science and many factors affect the perceived market value of a property.

Are you buying into a rising market? If not, you may be better off to get in there with a bucket of disinfectant and a stiff brush and simply scrub up, and leave the renovation / refurbishment until after you have established income from the property - which is more efficient from the ATO perspective plus you won't have to worry about 'refinancing' to reimburse yourself for the cost of the Pine-O-Clean and the squeegie!

Cheers
Kristine
 
Timocracy said:
Won't I have to pay the total amount of LMI rather then just the difference if I change banks to top-up?
Click to expand...

Yes you do. But I have no idea how much value you're going to add to the property etc. Comm Bank's policy of 6 months between valuation is pretty much standard anyway - it's unlikely you can change a property's value significantly within that time
 
Thanks for the replies guys! So hard to get the underlining rules the banks don't publish

The minor reno must be done, concrete floors. The reason I think it's undervalued is because the market is very weak and it has minor faults, people are getting nicely done up places cheap so why go to any effort?

They tried to auction it but no-one registered to bid.

No sales in the block since 2009 when there were three sales with a median of 290K(market has taken a dive since then about 10%) I put in 205K and they took it, my brother is a builder and he quoted me 7K max to get it up to scratch.

rental yield gross 7.1% net 4.6%
Capital gain 25year history 7.23%(Including 10% price drop)

Any criticism would be highly valued.... That's what the 5 day cooling off period is for!
 
Ask yourself one question - if the market is as weak as you say it is - why would a valuer give you a significant increase on a revaluation? It doesn't work that way
 
Hi Tim

Seems that you have had an eye on the market for a while

Keep collecting sales data, you will need plenty of it to press your case for the revaluation

So you’ve signed a Contract – what postcode, you mention a ‘block’ so is this a strata flat / apartment, how many storeys in the block

If you are using a Licensed Builder / Qualified Tradesperson to do the renovation with a Fixed Price Building Contract then even though it’s a small job you could borrow for the renovation at time of purchase rather than mess about ‘refinancing’ after settlement

So it all sounds quite achievable

Cheers
Kristine
 
Hey Aaron

I just got a valuation report today from a remote / low population postcode with a weak market - my customer refinanced the property in 2008, valuation was par for the course at that time

Apart from looking after the property / good housekeeping but no improvements (except the January floods which gave the garden a good soaking) - so was quite pleased that while the town market was definitely soft with few sales of any kind over the past 18 months, the valuation this week came back higher than the 2008 valuation - only 5% higher but higher.

For a town with a catchment population of less than 600 this was quite a good result

Oils ain't oils ... Tim may know his market quite well and local knowledge doesn't show up in the statistics

Anyway, leaving aside the capital value of the property, the flat sounds as if it has potential particularly if taken as a long term investment

Cheers
Kristine
 
postcode - 4215
strata-titled villa/townhouse
Mum is a retired real estate agent from the area and put me onto the place as a long term buy and hold.
 
Yes, Aaron, I am aware of that and was not doing more than pass the comment that, in essence, a well presented (or badly presented) property will 'step outside of' the general or prevailing market

Anyway, with postcode 4215, it seems that it is Tim, and not the property, who is in a remote area, unless, of course, the property is in an area affected by the recent floods in which case mortgage insurance may be hard to come by.

Tim - any riverine flooding in the town? Not just the street - earlier in the year there where whole towns 'beyond the pale' for some lenders, and not all areas are (yet) back on the menu

Kristine
 
Hey Tim!

Wheres the unit located?
I don't reckognise the postcode. It is cheap though. Is it in Katherine? Good rental yields there and extremely low vacancy rates
 
investor2009 said:
Hey Tim!

Wheres the unit located?
I don't reckognise the postcode. It is cheap though. Is it in Katherine? Good rental yields there and extremely low vacancy rates
Click to expand...

I recognise that postcode as Southport, Labrador if I remember correctly. the postcode may cover more but these were the burbs that I lived in when I was up in GC. He's right when the market up there is weak. Its come off the boil alot and it may its almost at its lowesst of lows. Good I reckon for thoselooking for a long term hold. Rents when I was there were scary for the properties i rented. Yields are now so much better.
 
Hi,

I didnt read all the post above- but im sure it's been mentioned.

1. dont change back on such a high LVR- LMI alone will make it financially NOT viable.

2. The 6 month rule is standard with most banks; property do not go up in value unless you give it time

3. Even if the property went up by 10% P.a ( which is a Lot!) that's 5 % for the 6 month...even that may not be sufficient for a valuer to increase it by 5% --- be aware they have to find 6 comparative sales in the last 3 month and they must have ALL done up in average.

4. Unless your place is "better' off then the average - ie renovated, new? etc then the valuation would be more then the average in that area etc..


Key point- do a valuation every 6 month to track it's progress and monitor the market and take note of each sales ( similar to yours)

Regards
Michael
 
CBA will do top ups to 95% (so will genworth but most all lenders won't) as long as purpose is home improvements or personal purposes ie no investment. Had one appeoved last week.

That said you will as the others have said struggle to get the Val improved. I suggest if you go down that path that you order the valuation upfront.
 
Marty McDonald said:
I suggest if you go down that path that you order the valuation upfront.
Click to expand...

Southport is my local turf. The valuer sentiment is set by few sales in the current environment with a view to going backwards by a lot ( still).

Marty's advice will serve 2 purposes.

1, You may get a slightly better val.
2. If you do get a sad val you havent wasted your time AND credit hit

ta
rolf
 
Timocracy said:
Just found this website - love it - first post.
Looking for some ideas on the best loan available to my situation.

-Buy price is considerably lower then my valuation of median price in block
-Small renovation required
-Would like to re-value and "top-up" back to 95% to get my money back on the renovation/invest in more property ASAP

I'm looking for a 95% lend plus LMI capitalised. I've found combank will do it however their rates are not the best and they require 6 months prior to re-valuation(top-up).

Any ideas? I'd love to see a broker but I live very remote.
Click to expand...

how much does that cost for the LMI if it is 95% ?
 
You must log in or register to reply here.

Similar threads

U
Land/Construction Loan
Replies
19
Views
4K
Shahin_Afarin
Shahin_Afarin
W
Finance Qs for equity valuation and LMI
Replies
10
Views
2K
Brady
Brady
W
Help with Mortgage agent Sydney for 95% LVR loans
2 3
Replies
40
Views
5K
Mick C
Mick C
R
Valuation Coming Back at Sale Price Two Months After Settlement
Replies
17
Views
3K
WigansAFC
W
W
Need advice on 95% LVR loan
Replies
7
Views
1K
write2abdul
W
Back
Top