CBA Valuation and Equity

[Raja]

Hi All,

Assuming there was a house which was bought for $10 with a 95% lend from CBA. Say the house value increased to $12 and CBA did a new valuation.

I have been advised by someone at CBA they could lend me the difference up to 95% of the new value. So the existing loan is $9.5. and 95% of $12 would be $11.4 meaning they could lend an extra $1.9 taking the LVR back to 95%.

However I have also been advised if I were to take this option I would need to pay LMI on the full amount of $12 even though I paid LMI on the $10 previously and the new loan would only be for $1.9.

Could someone advise if this advice is correct or I should speak to someone else at CBA?

Thank you.

 

[Marty McDonald]

Hi Raja,

Top up lmi would be payable only which would be a fraction of a new premium.

Unless you didn't pay lmi last time ie not sure what happens if you paid their low deposit premium (self insurance) last time and now don't qualify? Anyone else come accross this.

 

[Rolf Latham]

Hi raja

Correctly structured, and assuming you have PAID lmi previously and none of the details of the loan change except for the amount, then you need only pay a top up premium usually.

Either someone isnt on the right wavelength OR they are looking to rewrite the loan in full


ta
rolf

 

[Mick C]

Hi All,

Assuming there was a house which was bought for $10 with a 95% lend from CBA. Say the house value increased to $12 and CBA did a new valuation.

I have been advised by someone at CBA they could lend me the difference up to 95% of the new value. So the existing loan is $9.5. and 95% of $12 would be $11.4 meaning they could lend an extra $1.9 taking the LVR back to 95%.

However I have also been advised if I were to take this option I would need to pay LMI on the full amount of $12 even though I paid LMI on the $10 previously and the new loan would only be for $1.9.

Could someone advise if this advice is correct or I should speak to someone else at CBA?

Thank you.

Yep you need to pay for the pro rated prem- prem is calculated on LVR amount + also on the loan amount....your loan amount in this case has changed.

It wont be a huge increase tho; but never the less something you need to pay; unless you keep the loan amount to the original or under


Regards
Michael

 

[Raja]

Hi raja

Correctly structured, and assuming you have PAID lmi previously and none of the details of the loan change except for the amount, then you need only pay a top up premium usually.

Either someone isnt on the right wavelength OR they are looking to rewrite the loan in full


ta
rolf

Thanks Rolf, I called the new loans department at CBA and they confirmed LMI would only apply on the new loan amount.

Seems like the relationship manager CBA assigned to me is not very familiar with the loans side of things.

 

[Rolf Latham]

Seems like the relationship manager CBA assigned to me is not very familiar with the loans side of things.

Not ideal, im happy that you questioned it !

ta
rolf