Help with Mortgage agent Sydney for 95% LVR loans

[tobe]

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.

ANZ only go to 97% inclusive of LMI for existing customers, 92% for those new to bank.

Rams capitalise to 98.5%, and dont credit score.

 

[Mick C]

In most part of Sydney you will need to put down 0.25% to secure the purchase ( Unless it's CBD - ie 2000 etc.. or over $1.5 M in purchase price- where agents are more flexible as it's a slightly slower market)

Most property under $800 sells within 1-2 weeks!

The only way around this is to make sure you do your due diligence and buy at the right price.

1. Have access to RP data/ Price finder
2. Monitor the market for that area for a good period of time

^ all part of due diligence.

if your going to pay a touch over the market, be prepare to have cash for the short fall especially if your going for the MAX LVR already.

Lastly at 100% LVR ( 95% + Full LMI) your file needs to be strong! and low credit hits..so dont randomly apply for pre-approval if you dont need to.

 

[Marty McDonald]

I can order Val's upfront for Bankwest but you have to also be strong credit scoring wise. Feel free to contact me

 

[Marty McDonald]

I can order Val's upfront for Bankwest but you have to also be strong credit scoring wise. Feel free to contact me

BTW a Bankwest pre approval is not worth the paper it's written on so don't try that route as your application won't be credit scored or even assessed by a human until there is a signed contract for sale. Have seen at least 10 people with pre approvals from BW that have ended up being declined over the years. Some now loyal clients even!

 

[Moneyman_85]

Sorry for my ignorance lol, but isn't there a standard 14 day clause?

Or is that out the window for Sydney buyers?

 

[Terry_w]

Sorry for my ignorance lol, but isn't there a standard 14 day clause?

Or is that out the window for Sydney buyers?

in NSW the standard is 5 days cooling off with loss of 0.25% if the buyer pulls out.

 

[write2abdul]

Thanks rajneths!

I'm looking at a property where the RP data shows an estimate of 641K. This property is renovated and the agent wants 700K. What do you suggest?

I have PMed you for your agent contact details

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.

 

[write2abdul]

Thanks for the tips Terry!

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

 

[Peter_Tersteeg]

I'm looking at a property where the RP data shows an estimate of 641K. This property is renovated and the agent wants 700K. What do you suggest?

This is about a 10% difference which would be an acceptable margin of error. In other words, the property could be worth $700k, or it could be worth $641k.

You can't simply rely on a report, you need to perform your due diligence and make your offer based on what you believe it is worth. Your RP Data report is only one element in this process.

 

[write2abdul]

Thanks Mick!

Are the RP data estimates accurate in Sydney? The property i'm looking at is estimated at 641K but the agent is looking at 700k. What do you think? Would I be overpaying?

In most part of Sydney you will need to put down 0.25% to secure the purchase ( Unless it's CBD - ie 2000 etc.. or over $1.5 M in purchase price- where agents are more flexible as it's a slightly slower market)

Most property under $800 sells within 1-2 weeks!

The only way around this is to make sure you do your due diligence and buy at the right price.

1. Have access to RP data/ Price finder
2. Monitor the market for that area for a good period of time

^ all part of due diligence.

if your going to pay a touch over the market, be prepare to have cash for the short fall especially if your going for the MAX LVR already.

Lastly at 100% LVR ( 95% + Full LMI) your file needs to be strong! and low credit hits..so dont randomly apply for pre-approval if you dont need to.

 

[write2abdul]

Wow. Thats scary. Thanks for the tip!

BTW a Bankwest pre approval is not worth the paper it's written on so don't try that route as your application won't be credit scored or even assessed by a human until there is a signed contract for sale. Have seen at least 10 people with pre approvals from BW that have ended up being declined over the years. Some now loyal clients even!

 

[write2abdul]

Thanks Mate! Any tips of how not to overpay

Play a less risky game please

 

[write2abdul]

Noted! How much of a price difference do you suggest is acceptable from the reports?

This is about a 10% difference which would be an acceptable margin of error. In other words, the property could be worth $700k, or it could be worth $641k.

You can't simply rely on a report, you need to perform your due diligence and make your offer based on what you believe it is worth. Your RP Data report is only one element in this process.

 

[Mick C]

You dont just look at the "price" that RP data splits out...that's not using the software corrctly...it's only used a a guide...the most important data is what property RP data used to "compare" and how much did that sell for an when..

Ie A house price involves a lot more than just the sale data and sold price..a lot a "computer" can not pick up or tell the difference...else we wouldn't have bank valuers but instead bank would just use RP data right?

- Is the property renovated?
- Extra features
- Bigger land
- Newer
- Better street
- Better configuration
- Damage to the property
- Extra study room
- Size of each room and living space ( not all are the same ..)

Using all the above data and skills set ( i personally use price finder) you should be able to adjust the price to give you a better indication..

 

[tess85]

I've seen RP data and Residex reports for the same property and I think Residex is a little more accurate / gives more information due to the 5 metrics it has when trying to value a place (based on street value, land size, last sale price etc). Pricefinder is good too when you can adjust the better/worse rating for the comparables yourself.

 

[mumbai]

You dont just look at the "price" that RP data splits out...that's not using the software corrctly...it's only used a a guide...the most important data is what property RP data used to "compare" and how much did that sell for an when..

Ie A house price involves a lot more than just the sale data and sold price..a lot a "computer" can not pick up or tell the difference...else we wouldn't have bank valuers but instead bank would just use RP data right?

- Is the property renovated?
- Extra features
- Bigger land
- Newer
- Better street
- Better configuration
- Damage to the property
- Extra study room
- Size of each room and living space ( not all are the same ..)

Using all the above data and skills set ( i personally use price finder) you should be able to adjust the price to give you a better indication..

^^ that
and look for comparable properties in the vicinity, what they are listed for or sold recently for. Let me know if you need help with that.
Also, as other members have replied, do not solely rely on the RP data estimate.. well its just an estimate.
Good Luck!

 

[magic]

Signing a contract with a cooling off period is a good option, so you can secure the deal, that gives you time to secure finance and the valuation and you only loose 0.25% if you don't get finance approval and you might also be able to get extensions on the 5 day cooling off period if the vendor agrees.

You should compare a few similar sold properties rather than a computer generated price estimate, they are highly inaccurate.

 

[write2abdul]

Hi Peter and other Folks

Do you think its a good idea to buy in an auction with the following

1) Get loan pre approved
2) 95% LVR + LMI capitalization agreed in the pre approved loan
3) Buy 2-5% less than the current market price in that area
4) Have 5-10K extra just in case the valuation comes down lower

What do you think?

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.

 

[Terry_w]

Hi Peter and other Folks

Do you think its a good idea to buy in an auction with the following

1) Get loan pre approved
2) 95% LVR + LMI capitalization agreed in the pre approved loan
3) Buy 2-5% less than the current market price in that area
4) Have 5-10K extra just in case the valuation comes down lower

What do you think?

I don't think it is a good idea as it would be pretty risky.

If you had the ability to put in more deposit if needed then the risk would drop

 

[write2abdul]

Thanks Terry! Looks like I have to save more money

I don't think it is a good idea as it would be pretty risky.

If you had the ability to put in more deposit if needed then the risk would drop