Any Lenders that will revalue IP after 1-2 months of settlement?

[beachy]

For typical buy, reno, revalue, release equity, hold strategy

2 Brm Unit. Under $150,000.
Original 88-90% LVR at purchase
New Equity release to be redrawn back to original LVR

For the Finance Brokers, any lenders will be do revalue after 1-2 months? I know usually its not less than 3 months.

Many thanks in advance. Cheers!

 

[Aaron_C]

Yeah it's fine. If you've done substantial renovation I don't see a big issue but it helps if you can do a customer ordered valuation to bypass the credit officer.

 

[Rolf Latham]

at >80 % there are other issues at play as well

Some lenders cant use their DUA where the last approval was within 90days......... so even if u get a hot val, you may think twice in drawing the equity because the LMI provider may not allow it, PLUS you may have 2 CRAA enquiries



ta
rolf

 

[Aaron_C]

Just note that even if you settled 1-2 months ago your valuation is most likely to be 4 months old anyway.

 

[Jamie M]

For the Finance Brokers, any lenders will be do revalue after 1-2 months? I know usually its not less than 3 months.

Yes there are - but ideally you'd want to stick with your current lender since you've already paid LMI. Therefore, any increased borrowings should only incur a small top-up to your existing LMI premium.

What's your current lender like when it comes to quick revals? Who are you with?

Refinancing to another lender will cost you a whole new LMI premium - so it's a matter of weighing up the pros/cons if it can't be done with your current lender.

Cheers

Jamie

 

[Peter_Tersteeg]

The problem isn't that you can't get another valuation; that's the easy part.

The problem with getting another valuation after a short period is that the valuer may look at the property, note when you purchased it (and your purchase price) and simply state that there has not been any significant increase in value since the purchase.

It helps if you've made substantial improvements to the property since settlement and it's also useful if the same person values the property (so they know what they're comparing).

If there haven't been any improvements, the likely result is going to be the same price you paid for it.

 

[beachy]

What's your current lender like when it comes to quick revals? Who are you with?
Cheers

Jamie

Using cash to fund this next purchase. Currently have CBA & Homeside.

Used a broker with CBA and the reval was $99 and good turnaround for reval after purchase (I can't remember how long it was last time). Not fussed on the lender as I'm looking for the right terms/strategy so that I can move forward. Will keep the same lender for reval. Don't want to use the same broker so I'm on the lookout for a new broker, and will most likely experiment with someone on SS for next purchase.

 

[beachy]

Some lenders cant use their DUA where the last approval was within 90days......... so even if u get a hot val, you may think twice in drawing the equity because the LMI provider may not allow it, PLUS you may have 2 CRAA enquiries

ta
rolf

Sorry Rolf, what is DUA? I found the definition of CRAA (not up on this finance lingo)

 

[Aaron_C]

Sorry Rolf, what is DUA? I found the definition of CRAA (not up on this finance lingo)

DUA means delegated underwriting authority i.e. lenders can write their own LMI loans on behalf of the mortgage insurer without having to refer it to them.

If the loan is already with CBA then your best bet is to stay with them for the increase but given it is CBA they will need to see the purpose of the funds for an LMI loan and equity release.

 

[Mick C]

The problem isn't that you can't get another valuation; that's the easy part.

The problem with getting another valuation after a short period is that the valuer may look at the property, note when you purchased it (and your purchase price) and simply state that there has not been any significant increase in value since the purchase.

It helps if you've made substantial improvements to the property since settlement and it's also useful if the same person values the property (so they know what they're comparing).

If there haven't been any improvements, the likely result is going to be the same price you paid for it.

^^ Yep pete is on the ball!

8/10 the valuer will see past sale and if there haven't been any major changes/improvements than it will be the same price as what you have bought for...you may have spent $20,000k in renovation, however the new valuation might only come back with an $5,000 increase etc...as not all renovations adds value ( could be just an upgrade or repair work) and not all renovation adds the "same type of value"

 

[beachy]

DUA means delegated underwriting authority i.e. lenders can write their own LMI loans on behalf of the mortgage insurer without having to refer it to them.

If the loan is already with CBA then your best bet is to stay with them for the increase but given it is CBA they will need to see the purpose of the funds for an LMI loan and equity release.

Thanks Aaron.

Currently: 2 loans with Homeside & CBA for 2 IPs & PPOR.

Have cash now to buy IP 3, so on lookout for new lender with capacity to revalue within 1-2 months...could be with CBA or another

 

[ipinvestor]

Revaluation within 2 months

Yeah it's fine. If you've done substantial renovation I don't see a big issue but it helps if you can do a customer ordered valuation to bypass the credit officer.

We bought a property, Renovated it. It took 3 weeks. Aaron C ordered revaluation. We pulled out 80K equity within 2 months.

 

[zimby]

We bought a property, Renovated it. It took 3 weeks. Aaron C ordered revaluation. We pulled out 80K equity within 2 months.

This is what we are doing, except with a refinance instead of buy.
We added an additional Bedroom, hoping to use the auto Val at 80%

 

[Spades]

The problem isn't that you can't get another valuation; that's the easy part.

The problem with getting another valuation after a short period is that the valuer may look at the property, note when you purchased it (and your purchase price) and simply state that there has not been any significant increase in value since the purchase.

It helps if you've made substantial improvements to the property since settlement and it's also useful if the same person values the property (so they know what they're comparing).

If there haven't been any improvements, the likely result is going to be the same price you paid for it.

Hi PT_Bear,

What if you bought 10% under value?

Also there was 2 bedder house sell a month after i purchased in the same street,same size block but mines a 4 bedder,it sold 15% above for what i purchased mine.

My block was overgrown too and you could not see the garden,would clearing the vegetation and landscaping the garden,to which i've done,add value as well?

Cheers Spades.

 

[Peter_Tersteeg]

Depends on how generous and how well informed the valuer is. It's also difficult to establish that you truly bought 10% under value. Perhaps these other houses are slightly better.

Valuers are also giving consideration to how long it will take to sell the property and there is also a discretionary component as well. Plus or minus 10% on a property value is really a nothing amount. You don't see valuers giving a result of 5% less than the actual purchase price because that last 10% is fairly discretionary and they'll say, "Close enough."

Without the renovation, the valuer is highly likely to simply reiterate the purchase price, unless the market is known to be moving very quickly (in which case they may deliberately undervalue and comment about the risk of a crash).

Regardless of the time frame if you're going for a re-value, you probably want to be trying for at least a 20% increase. This takes it out of the realm of opinion and back into the science of comparable sales.

 

[Moneyman_85]

ipinvestor - "We bought a property, Renovated it. It took 3 weeks. Aaron C ordered revaluation. We pulled out 80K equity within 2 months. "

What did the renovation consist of?

A major upgrade? (new kitchen, bathroom, repaint, landscape etc.)

John.

 

[jrc77]

We bought a property for approx $700k and spent $75k on a reno. At the end of the reno got a valuation back of $750k - disaster! Waited three months and got another valuation done (earliest we could redo it) and it came in at $875k.

Note part of the reno cost was converting part of the property into a granny flat - so not expecting a 1:1 return on capital on that part - but the rent increase has been very nice.

Was the first valuation bad? Or the second overly optimistic? Or a wide range because it is a difficult property to value?

Regards,

Jason

 

[jonmardell]

We bought a property for approx $700k and spent $75k on a reno. At the end of the reno got a valuation back of $750k - disaster! Waited three months and got another valuation done (earliest we could redo it) and it came in at $875k.

Note part of the reno cost was converting part of the property into a granny flat - so not expecting a 1:1 return on capital on that part - but the rent increase has been very nice.

Was the first valuation bad? Or the second overly optimistic? Or a wide range because it is a difficult property to value?

Regards,

Jason

Were there different comparable sales used in the 2 different valuations? There might have been some more recent sales of similar properties used in the most recent one.

 

[Mick C]

We bought a property for approx $700k and spent $75k on a reno. At the end of the reno got a valuation back of $750k - disaster! Waited three months and got another valuation done (earliest we could redo it) and it came in at $875k.

Note part of the reno cost was converting part of the property into a granny flat - so not expecting a 1:1 return on capital on that part - but the rent increase has been very nice.

Was the first valuation bad? Or the second overly optimistic? Or a wide range because it is a difficult property to value?

Regards,

Jason

Very common for granny flats, as this is considered a major "renovations"/ structural and your creating more space and an extra bedroom etc...however having said that it does depend on the area your building the granny- some areas the market and banks valuation does go up by 1;1 for granny ( unfortunately not western Sydney ....)