Help with Mortgage agent Sydney for 95% LVR loans

[write2abdul]

Hi Folks,

I would need help from a mortgage agent who could help me with a 95% LVR loan in Sydney. My current situation

* Looking to buy 700K PPOR property
* Have 5% genuine savings deposit
* Have savings for stamp duty for 700K
* Good stable income
* Need 100% LMI capitalized on the loan

As its a seller market right now, I think I would have problem with bank valuations as 95% LVR loans are considered high risk.

Is there a agent you guys would recommend who could do property valuations done by the bank before signing the contract. The reason I ask is that I would be loosing 0.25% every time I sign a contract and the bank valuation comes lower. The sellers agents and vendor would never sell less than the rpdata or some other site suggested value range.

 

[Terry_w]

very hard to get LMI capitalised into the loan now. CBA go up to 97%. ANZ capitalise, but you need to be an existing customer.

 

[write2abdul]

Thanks Terry!

I was looking at bankwest as they do get LMI capitalised into the loan.

Looking at someone who could help me get the bank valuation done before I sign the contract as my situation is 95% LVR + sellers market which means I would loose 0.25% deposit every time bank values lower.

I'm surprised that there's no subject to valuation clause in NSW

very hard to get LMI capitalised into the loan now. CBA go up to 97%. ANZ capitalise, but you need to be an existing customer.

 

[Terry_w]

I'm surprised that there's no subject to valuation clause in NSW

There is if you insert one!

 

[RetireRich101]

There is if you insert one!

..but a sellers market in Sydney. If I was a vendor, I rather see what next 10 offers first before I think about inserting any financial clause.

 

[write2abdul]

Thats how it has been going. Had my offered accepted but agent didn't agree to subject to valuation clause and I had to drop off with the risk I was in with the 95% LVR

..but a sellers market in Sydney. If I was a vendor, I rather see what next 10 offers first before I think about inserting any financial clause.

 

[Mick C]

95% + full LMI is ok - max 100% LVR.

Upfront valuation before signing contract is also ok- but you will need to pay this cost upfront to the valuer as the bank also don't want to be out of pocket esp with no sign contract... Cost ~$250 - $350 depending on banks valuer, 2-3 days turn around normally with valuation depending on access.

The only risk you have with carrying out a valuation before signing the contract is that the place might be sold to someone else OR the price might change, no refund on valuation cost + can not do a re-value should the asking price change.

Cheers

 

[Jamie M]

Looks like you need a lender with full LMI cap (ie. not restricted to a total lend of 97% including LMI).

Bankwest are still doing these - but aren't overly keen on them, so credit scoring is a bit harsher and unless your broker writes a LOT of business with them, upfront vals may not be possible.

I wouldn't risk going unconditional on a purchase in your situation.

Terry and Mick are in Syd - perhaps give one of them a buzz.

Cheers

Jamie

 

[Montoya]

RAMS still do 97% loans (95% + LMI)

 

[write2abdul]

Thanks Mick!

Ya the Sydney market is so hot that the agents are not willing to wait for 3 days with the offer.

95% + full LMI is ok - max 100% LVR.

Upfront valuation before signing contract is also ok- but you will need to pay this cost upfront to the valuer as the bank also don't want to be out of pocket esp with no sign contract... Cost ~$250 - $350 depending on banks valuer, 2-3 days turn around normally with valuation depending on access.

The only risk you have with carrying out a valuation before signing the contract is that the place might be sold to someone else OR the price might change, no refund on valuation cost + can not do a re-value should the asking price change.

Cheers

 

[write2abdul]

Thanks Jamie!

My credit rating is good with good stable income.

Ya I wouldn't want to risk with going unconditional on my purchase. Any help from experts like you would be appreciated.

Looks like you need a lender with full LMI cap (ie. not restricted to a total lend of 97% including LMI).

Bankwest are still doing these - but aren't overly keen on them, so credit scoring is a bit harsher and unless your broker writes a LOT of business with them, upfront vals may not be possible.

I wouldn't risk going unconditional on a purchase in your situation.

Terry and Mick are in Syd - perhaps give one of them a buzz.

Cheers

Jamie

 

[write2abdul]

Thanks Montoya! I'm looking at 95% + 100% LMI and 97% wouldn't suffice for me

RAMS still do 97% loans (95% + LMI)

 

[Rolf Latham]

The sellers agents and vendor would never sell less than the rpdata or some other site suggested value range.

would be quite rare for a valuer to use the CMA output from a modelled Val verbatim

With an approx 36 000 LMI premium,my counsel would generally be to either save more dough, or lower the loan amount to sub 500k

Yes that wont get you what you want straight up............ but may well serve you better for the future.

The chance of getting a 100 % deal through LMI is skinny

ta
rolf

 

[Montoya]

How about these guys?

http://www.homeloanexperts.com.au/

they have a live chat option during business hours.

 

[Peter_Tersteeg]

the price might change, no refund on valuation cost + can not do a re-value should the asking price change.

Mick has highlighted a very good reason not to get an upfront valuation.

If you get an upfront valuation, the valuer will give their professional opinion on the property value. They won't be influenced by a contract price because no contract exists. Essentially they'll use the same method to value the property as they would if the property were being refinanced.

The valuation result is likely to be somewhat conservative. The vendor probably won't accept this on advice from the real estate agent and you won't be able to purchase the property at the valuation amount. Additionally that lender will no longer accept a higher purchase price than that valuation result.

For several years now, refinance valuations have been generally lower than anticipated. Purchase valuations have been generally right on the contract price.

By getting a valuation up front, you almost guarantee that you won't be purchasing the property.

 

[write2abdul]

Peter, First of all thank you for your report that your assistant has sent me. Really appreciate your help and service in helping members of this forum

What advice you would give for my current situation ?

a) Agents are not fine with giving time or subject to valuation which means I would loose 0.25% every time.

b) Mick had suggested for the up front valuation which has the risk involved of the valuation coming lower.

Is there no way I could get into the property market with my deposit? You guys might have helped lot of folks in similar situation???

Mick has highlighted a very good reason not to get an upfront valuation.

If you get an upfront valuation, the valuer will give their professional opinion on the property value. They won't be influenced by a contract price because no contract exists. Essentially they'll use the same method to value the property as they would if the property were being refinanced.

The valuation result is likely to be somewhat conservative. The vendor probably won't accept this on advice from the real estate agent and you won't be able to purchase the property at the valuation amount. Additionally that lender will no longer accept a higher purchase price than that valuation result.

For several years now, refinance valuations have been generally lower than anticipated. Purchase valuations have been generally right on the contract price.

By getting a valuation up front, you almost guarantee that you won't be purchasing the property.

 

[mumbai]

Peter, First of all thank you for your report that your assistant has sent me. Really appreciate your help and service in helping members of this forum

What advice you would give for my current situation ?

a) Agents are not fine with giving time or subject to valuation which means I would loose 0.25% every time.

b) Mick had suggested for the up front valuation which has the risk involved of the valuation coming lower.

Is there no way I could get into the property market with my deposit? You guys might have helped lot of folks in similar situation???

Why do you think you will lose your 0.25% everytime due to valuation? I believe that either you are offering much more than the market value to secure a property or putting your hands into the OTP territory.

All of my properties were valued on the contract price and I guess other SSers might have a similar experience.

Do the numbers again. Check with a mortgage broker the max you can borrow taking into account the stamp duty, legal fees, etc. Only commit yourself to what you can borrow and do not offer way high than 'market value'.

The agents will keep saying that the market is hot and what not. You put forth your offer with the clause, get the pest & building inspection done and valuation done.

You will be alright. Pm me if you need contact details of my Mortgage Broker. I have been pretty happy with him thus far.

 

[Terry_w]

It is rare for a purchase valuation to come in at less than purchase price where a contract is involved.. I can't recall a valuation ever coming in lower for my clients. You would have to be really paying over market for that to occur.

Refinancing valuations are different and often come in lower than client expectations andd this is because there are no contracts to determine the value - and because people generally think their properties are worth more than they actually are.

With th 0.25%, you will only lose this if you exchange contracts. You could agree on the terms of the contract and sign it and then get the valuation done. You could even give the signed contract to the agent with instructions not to exchange until you say so. They will know you are serious then.

The 0.25% is negotiable too. Contract that if the rights under cooling off are exercised then you will get the ful deposit paid back.

What about agreeing to sign a s66w if the valuation comes back at purchase price - no cooling off period. A seller wouldn't like a cooling off as the buyer could leave so a 3 day shorter cooling off would be attractive.

or sign a s66w with a subjecct to valuation clause in contract.

speak to your lawyer about the legal side

 

[D.T.]

Play a less risky game please

 

[Peter_Tersteeg]

Peter, First of all thank you for your report that your assistant has sent me. Really appreciate your help and service in helping members of this forum

What advice you would give for my current situation ?

a) Agents are not fine with giving time or subject to valuation which means I would loose 0.25% every time.

b) Mick had suggested for the up front valuation which has the risk involved of the valuation coming lower.

Is there no way I could get into the property market with my deposit? You guys might have helped lot of folks in similar situation???

Honestly I think the risk here comes from needing to finance 95% of the purchase price plus all the LMI, not the valuation. Having a valuation not come in at the purchase price is actually fairly rare. It does happen from time to time, but not often. It's even rarer if you're buying at auction.

The real risk in this scenario is the extremely high LVR. Lenders (the mortgage insurer) will look for reasons not to approve the loan. In the event the preferred lender doesn't approve the loan, there's very few alternative lenders.

The best option would be to find a way to save more deposit to get the LVR down to 90% + LMI. At that point you've got multiple options. You'll need the 10% deposit plus the stamp duty. As a rule of thumb this comes to 15% of the purchase price.