Finance Qs for equity valuation and LMI

Hey Guys,

Currently awaiting finance approval for a property, in which relies on some equity from other properties owned to get it over the line.

I was conservative with my value estimates for the other two properties, however I am still concerned as I have had 3 valuations done for 3 very different values in the past on same properties.

The fact is that the medians of both suburbs basically align with what I value the properties at. I have also found that Pricefinder values them too high, and onthehouse values them too low... An average of these two gives me a median in which also averaged the price roughly of what all 3 valuations gave me.

As I would like to pay a minimum amount of LMI, I am hoping that the valuations come through ok. Can anyone tell me what WESTPAC does when valuing IP's? Is it a desktop or walk through??

Furthermore, This is my 3rd property purchase, and the previous two properties both had LMI. The first property was a 95% lend and the second was a 90% lend (Cash deposit).

Just wondering if there is a way to calculate what sort of LMI credits I would get???

I would like to know what to expect from the bank.

Lastly, what is the general outcome if the IP valuation comes back extremely low... (Unlikely, but would like to know)... The lending manager mentioned a flexi loan to cover any shortfall... Is this common??
Can anyone tell me what WESTPAC does when valuing IP's? Is it a desktop or walk through??

Depends on the LVR and a few other paramaters. Your broker/banker should be able to tell you which is being carried out.

With the LMI - your banker/broker should be able to do a quick calculation. You'll need to know how much you paid previously and provide them with that info.


Thanks for the reply.

I ask the questions but I get the whole "Credit team sorts that out" treatment.

LVR will be approaching 95% as a worst case and total lend will be close to $1m so there is a lot riding on the valuations.

All loans have been with Westpac so I am hoping they have records of the LMI I have paid in the past two loans?

Suppose just have to keep waiting to see the outcome.
We've had an incredible amount of problems with a Westpac valuation recently. We've been ringing daily to try to get it sorted out to little avail. Fortunately it looks like its going to be finalised today/tomorrow, but it's already been 3 weeks.
You need a whole rethink.

Ok, I appreciate your input, however I am not sure what you are getting at.

I called and asked some more details:

"We are getting the overall lend approved and the LVR will be based on the returned valuations of the properties. Then we will draw down the loan into the separate loans."
Sounds like it could be crossed or it might not?

I would suggest further discussion.

You shouldn't be left in the dark around how much LMI you could be up for. With most 1st appointment I run through 3 different valued properties with 3 different LVR's to show the differences. It really isn't a time consuming task for someone with little knowledge.

You should also be sure if it is going to be crossed or not, ESPECIALLY if you're paying LMI. If you're not confident with your current banker/broker I highly suggest changing.