Interest only loan

Hi SS Members

I have a IO loan on an investment property that has come to the end of the IO period. The bank (a major 4) has requested that I make a full application for the IO loan to continue.

My concern is that this will trigger a new valuation and the property value has fallen below the outstanding loan by approximately $50k.

Has anyone been in a similar situation where the extension of an IO loan has resulted in a new application and a bank valuation?

If a valuation is likely then I might have to consider letting it revert to P&I until the property value picks up because I don't have the funds to meet the loss.

Thanks

Lisajane
 
Hi

Hi Lisa,

You may need to organise another valuation as Jamie has suggested.
Talk to your mortgage broker and get him or her to organise a upfront valuation.

Also take note there are other lenders out there too :)
 
Sounds like a straightforward tick and flick with Anz.

Talk to your Broker or Anz Banker and get them to organise it.

If it is non credit critical with Anz it is fairly painless.

Cheers
 
The ANZ valuation system often gives the broker the opportunity to simply use the last valuation on record. I've seen them go back a couple of years. There's a good chance that this won't be an issue if you can accept the previous valuation.

As a broker though, I usually get a new one ordered, because the last few years values have generally increased. You probably want to discuss this with your broker before they order the valuation so they don't make a mistake that can't be taken back.
 
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