Is it difficult to add to loan for reno? St George

[Azazel]

Hi guys, another question:
Is it difficult or straight forward to add an amount to our IP loan for a small renovation? Any idea how long it might take for funds to be available? And finally, is that the right way to go rather than using our money from the offset account? Loan is with St George.

 

[Jamie M]

Depends on the LVR.

Usually not that difficult though (but they do have their moments). Last one I done was a 90% top up for an SS client last week that seemed to go without a hitch.

Cheers

Jamie

 

[Rolf Latham]

Money in offset is usually tax paid cash so best not to use and offset against non deductible debt of hold back for later non ded purchases

Ta

Rolf

 

[Redom]

Do you have equity available in your property? Can be done, budget for a couple weeks for it all to finalise and funds be made available (a lot quicker than external refinances). If its at a high LVR, receipts/quotes MAY be necessary to evidence the 'purpose' of cashing out funds.

Cheers,
Redom

 

[Azazel]

Do you have equity available in your property? Can be done, budget for a couple weeks for it all to finalise and funds be made available (a lot quicker than external refinances). If its at a high LVR, receipts/quotes MAY be necessary to evidence the 'purpose' of cashing out funds.
Cheers,
Redom

Yeah we have equity, want to do a small reno and then get it valued.
So maybe get it valued (access funds), then reno, then re-valued?
It is 80% LVR at the moment.

 

[Redom]

Yeah we have equity, want to do a small reno and then get it valued.
So maybe get it valued (access funds), then reno, then re-valued?
It is 80% LVR a the moment.

If you're taking the LVR beyond 80%, add the cost of LMI to the reno job when crunching the numbers.

If you've got funds available to you, it may be best to just use that as you wont be stumped with LMI.

Another advantage of keeping the LVR below 80% is it will allow you to valuer shop (order vals from a few different banks) when your pulling the equity out again after the reno.

Cheers,
Redom

 

[Jamie M]

Might be lmi involved but if funds are being used for renos it should be deductible - as should the equity release.

If you paid lmi previously - then best to stick with st george for the top up.

 

[Azazel]

Let's say the house was $250,000 bought with 20% deposit (No LMI).
If it gets valued and it has increased to $285,000 is there a way to access $8,000 for a renovation without paying LMI?

 

[Redom]

Let's say the house was $250,000 bought with 20% deposit (No LMI).
If it gets valued and it has increased to $285,000 is there a way to access $8,000 for a renovation without paying LMI?

Yes, you can access $28,000 without paying LMI! (serviceability permitting).

Your current loan is $200k. An 80% LVR of a $285,000 valuation is $228,000.

Leaving you $28,000 in equity to withdraw with no LMI.

Cheers,
Redom

 

[Azazel]

Yes, you can access $28,000 without paying LMI! (serviceability permitting).
Your current loan is $200k. An 80% LVR of a $285,000 valuation is $228,000.
Leaving you $28,000 in equity to withdraw with no LMI.
Cheers,
Redom

That would be very good, thanks for the info!
I'm guessing I will need to get St George to do a valuation?

And thanks for the replies Jamie and Rolf.

 

[albanga]

That would be very good, thanks for the info!
I'm guessing I will need to get St George to do a valuation?

And thanks for the replies Jamie and Rolf.

Definitely start with them but not necessarily. If you have not previously paid LMI and your rate is not fixed then you can shop around and refinance to another lender if the valuation of St George doesn't stack up. You can get quite varied valuations.

I just refinanced to access equity for a subdivision of my property, CBA came in at 610, ANZ came in at 630. Ofcourse it was important than ANZ also fitted my future goals but the extra 20k is critical to the success of the project.

 

[Jamie M]

That would be very good, thanks for the info!
I'm guessing I will need to get St George to do a valuation?

And thanks for the replies Jamie and Rolf.

Yeah - just ask your broker if they have access to upfront vals. If using a banker - I'd assume they do.

 

[Watson1]

Hi guys, another question:
Is it difficult or straight forward to add an amount to our IP loan for a small renovation? Any idea how long it might take for funds to be available? And finally, is that the right way to go rather than using our money from the offset account? Loan is with St George.

We submitted a loan on the 25th last month and was approved and docs emailed on the 26th, customer collected docs on the 27th and drawdown occurred Thursday 5th so it can be done in a week. As certification is done by STG everything happens fairly quickly. It could have drawn down on Monday if we signed up the clients on Friday too.

In terms of cash out, we have never had any dramas. We cashed out $350k under medico waiver a couple of weeks ago.

I cannot foresee you having any issues with cashing out 8k with STG.

Like others have mentioned, request for upfront valuation as that is what would most likely prolong the application process.

 

[Azazel]

Definitely start with them but not necessarily. If you have not previously paid LMI and your rate is not fixed then you can shop around and refinance to another lender if the valuation of St George doesn't stack up. You can get quite varied valuations.

No LMI, not fixed. There are some time constraints as the tenant is breaking their lease so want to get some things done in between tenants. Will stay with St George for the reno funds, then get it revalued later. Considering our options to use LMI and add it to the loan with another lender at that time.

 

[Azazel]

Yeah - just ask your broker if they have access to upfront vals. If using a banker - I'd assume they do.

Cool. Is that like desktop valuation as opposed to kerbside valuation?

 

[Azazel]

We submitted a loan on the 25th last month and was approved and docs emailed on the 26th, customer collected docs on the 27th and drawdown occurred Thursday 5th so it can be done in a week. As certification is done by STG everything happens fairly quickly. It could have drawn down on Monday if we signed up the clients on Friday too.
In terms of cash out, we have never had any dramas. We cashed out $350k under medico waiver a couple of weeks ago.
I cannot foresee you having any issues with cashing out 8k with STG.
Like others have mentioned, request for upfront valuation as that is what would most likely prolong the application process.

That would be awesome. I'm glad we have some notice, we probably have 5 weeks at most if they don't skip out earlier. Would get stressed without the quick advice from this forum

 

[Watson1]

Cool. Is that like desktop valuation as opposed to kerbside valuation?

Either full vals or desktop vals can be ordered upfront.

If the assessor orders it, they have the ability to order desktop, kerbside and full.

1 week is best case scenario, it also depends on your lender/broker.

For instance, as we don't use Westpac anymore, the turnaround time would probably be ~3 weeks for us to organise a top up. However, since we do a lot of STG loans we receive quick turnaround time.

 

[Shahin_Afarin]

Going by previous experience the VMS system that St George, ANZ, AMP and Westpac use generally spits out a favourable desktop val versus a full val.

However you cannot tell the system what to order - in the case of St George, their internal credit system will dictate to the assessor what type of valuation to order.

So tread carefully with upfront vale for both St George and Westpac as they may give you a desktop val but once it hits their internal system this can change to a full val making the whole process a waste of time.

 

[Azazel]

So tread carefully with upfront vale for both St George and Westpac as they may give you a desktop val but once it hits their internal system this can change to a full val making the whole process a waste of time.

Could you explain what upfront valuation means please? I was thinking that must've meant desktop as opposed to kerbside.

 

[Shahin_Afarin]

Could you explain what upfront valuation means please? I was thinking that must've meant desktop as opposed to kerbside.

Upfront valuation = ordering a "type" of valuation prior to the submission of a full application and subsequent credit enquiry.

Types of valuations:

System Val: Broker or credit officer enters the details of the property including your estimated value of the property. The system can either reject your estimate and tell the user to order a full valuation or can accept it based on a certain LVR. So for example it will say yes agree with your valuation of $500,000 but can be only used for up to 85% LVR. If your LVR is over this then you will need to go with a full val.

Kerbside Valuation: This is where the valuer inspects the property from the outside. They do not go through the property. A lot of lenders are now doing those in lieu of of full valuations for 80% LVR apps.

Full Valuation (short form): A valuer goes through the property and takes pictures and provides a 5 page report.

Full valuation (long form): As per above but only done all specialised securities such as 3 or more dwellings. These valuations cost a lot more than short form valuations.

Note not all lenders offer the same range or type of valuations.

IMO - a lender that offers system vals is a huge advantage.