lending money on valuation



From: H T

Hi folks

18 months ago I brought a flat off the plan. By all reports, this thing has at least appreciated by 10% but 3 out of the big 4 refuse to even talk about getting a valuation done - they will only lend me 80% of the purchase price.

Has anyone run into this before and how have they emerged...

I bet if the market had dropped by an equivalent amount they'd be rushing valuers out to drop the value of the flat!

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Reply: 1
From: Rolf Latham

Hi Ht

Do you have a mortgage on the place. Really easy refinance if your exist lender will not pay ball. Even if you own it outright the bank will have to do its due diligence, expecially if you go for a > 80 LVR loan


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Reply: 1.1
From: H T

Hi rolf
no i haven't got a mortgage on the place yet, ive simply paid 10% dep 18months ago. The problem is this..
paid 400k off the plan, put down 40k deposit, market goes up 20% (80k) and the bank says "ill lend you money on the purchase (400k) price only", they dont seem to be to interested in a revaluation to see if it has in fact gone up.
Its no chop for me as it means i have more equity tied up in this place than i want, and it slow down my next ip purchase
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Reply: 1.1.1
From: Rolf Latham

Hya HT

I can see that they would have no interest in doing reval till it actually settles, very common.


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From: Smith Steven

Shop around
Plenty will lend on the new val.
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Reply: 2
From: Marina. L

Hi HT,

We bought 2 off the plans last year and 8 months later they had settled.
We knew that they had gone up in value and asked our banker for a revaluation.

"Oh no, you cannot have them revalued just yet. You need to wait at least 12 months"

Luckily we had been to some all inspiring seminars that actually talked about dealing with stubborn and know it all bank managers.
We knew that 99% of what they say is all rehearsed speel. We said quite firmly we know that the IPs have appreciated in value and it is our RIGHT to have them revalued.
After DEMANDING this she said O.K.

One valuation came in at a 25% increase and the other one at a 10% increase. We immediately redrew that equity and bought another IP. Had we listened to our bank manager we would have not been able to purchase the 3rd Ip so quickly.

The best part is that 3 months later after the original valuations were done we asked for another re-valuation on the 2nd IP because I had proof that an identical Ip had sold for much much more.
Again, she was a little bit hesistant, but being insistent she relented and hey presto, it had gone up another 15%. I again redrew that equity and that is there for another IP.

The bottom line is don't take what the banks say as Gospel, it is your business and you have to be in the drivers seat. You need to be Firm, insistent and know how to talk and approach the banks. This is not that easy to do for the average person and to be frank the majority of people are just too scared of the bank manager. When they finally get the courage to ASK and their request is declined they just take it without question.

If you want to get ahead in the IP business you need to always find a solution to a problem, and don't take No for an answer.

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Reply: 2.1
From: Glenn M

Great to hear.....go get 'em!!!

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