Bank does not love cracking walls

Hi all,

Long time reader, first time poster, I would like to say thank you to everyone contributed for the daily food of thought on the forum.

I hope someone shed me a light to avoid the coming mess.

I bought my PPOR midst last year in Sunshine VIC with 265k mortgage/ 400k value, and have 50k spare cash in offset account. With limited serviceability due to one income with a little kid, I have no plan for IP in near future.

Then my wife make life complicated by accepting an job offer end of last year. Suddenly we have double income and a bit cash in hand, then I went to the auction a rundown 70-80 year old house in Moonee Ponds with a limited number in mind. Dunno why I won the auction at 470k, just remember my wife nearly cried:" omg? do we have to buy this sh...?"

This is the first time we bid and just quick inspection prior to auction, so it would be a costly mistake. The house is full of cracking on wall, asbestos cladding and unlevel carpet floor. The lack of basic kitchen & bath let me understand why other investors stay away.

The nightmare happens when the ANZ scare of the house condition and may reject the loan at 89% + LMI. My FB argue that being an architect, I know what to do to save the house, so they pass the ball to their manager. But I smell a rat and it seems not work.


So if they come back next week with the sorry, I need to hope different lenders have different thinking in 2 weeks time left. If it's the case, which bank does not concern about the house condition? My FB suggest I may need to put more cash in to get 80% or do X-coll which I read a lot of bad things about it.

Please helps.

Cheers
 
All banks would have an issue if the valuer has high risk ratings in the val report. You could look for a lender that will do a kerbside val rather than full inspection.
 
The lack of basic kitchen & bath......
For future reference, banks generally do not like to lend on this type of property (deemed unliveable if no kitchen & bathroom facilities) AND if they did, generally not at the high LVR loan you are seeking.

Hopefully one of the brokers on here can help :(
 
I hate to say it, but had things been done differently, you probably could have avoided a valuation entirely.

It appears that your financial position is good enough to allow you to go with an 80% loan instead of something in LMI territory, but it will take a little creative structuring. If you can do this, then ANZ may not have required a full valuation, in which case the properties condition won't be an issue (because they won't know about it).

The only problem is, it looks like the valuation has been completed, so the cat is out of the bag. Other lenders may be able to work around this, but with the right structure, ANZ is the obvious choice.

Going for 89% + LMI is also a mistake as this puts the total deal above 90%, which means quite a few lenders need final sign off from the mortgage insurer. Even if the lender accepts the valuation, the mortgage insurer probably won't.

You can probably still get the deal done, but it's unlikely that it will be able to happen within a fortnight.
 
You have gone with the wrong lender for at least 3 reasons. You have another option. Ascertain a builder's quote to finish/fix the property and have your banker/broker submit this to the lender. You will need to build a case and push but doable.
 
Last edited:
So your wife made life difficult by getting a job and bringing more money into the family and you go out at auction and bid onn and win an unlivable house that you have not secured finance for... So who exactly is making life difficult?
 
So your wife made life difficult by getting a job and bringing more money into the family and you go out at auction and bid onn and win an unlivable house that you have not secured finance for... So who exactly is making life difficult?

I know I know... it's me again. :(

So much worry & stressful. I'll get the quote from builder and deal with ANZ at 80% to see what happens.

The valuer just note that he is unsure about the house condition/ structural and agree with that purchase price.

Thanks.
 
The valuer just note that he is unsure about the house condition/ structural and agree with that purchase price.

The cat is out of the bag on the valuation, had this been done up front they likely wouldn't have required a valuation at all. The good news is that they are more likely to approve the loan if it's at 80%.
 
FB = finance broker?

I sense something bad is going to happen here. I suggest you speak to someone else to get this sorted before you start losing too much on penalty interest. It can be done, I think your broker is an idiot for going for a 90% lend on this type of security.
 
To be fair to the broker Aaron, that person probably had no idea about the condition of the property.

Actually, my broker said that ANZ can lend under 90% without full valuation. The problem is there is a lot of images show cracking walls on realestates website that agent uploaded. Then the banker saw and the story begins. Obviously find that inexperience & overlooked the whole picture.

Perhaps my only chance is to give bank as much carrots as possible until they feel secured.
 
Back
Top