"No Valuation will be required." Does this mean...?

Bank just emailed me and said

"No Valuation will be required."

Does this mean the bank thinks I didn't over pay for the investment property? :confused:
 
Depends on the transaction type, LVR, etc. They run an APM and if the number is ok then they don't order the val.

What was the LVR?

Regards

Shahin
 
Depends on the transaction type, LVR, etc. They run an APM and if the number is ok then they don't order the val.

What was the LVR?

Regards

Shahin

Oh ok. Transaction type is im getting an investment loan of $630k for a $740k house (includes stamp etc)

What does APM mean?
Actions per minute?

How is LVR calculated? what is it? can you give an example?
 
LVR = Loan to Value Ratio = Loan amount divided by security amount.

So you have purchased the house and they didn't order the valuation on the purchase is that correct or was it for another existing security?

Regards

Shahin
 
I have my current house which is $650k with $200k loan left. (loan with the same bank).

I am getting an investment property priced at $740k (all up). I have $100k in my current homeloan that I will draw out.

I'm using both properties as security? (is this possible)?
(They are not asking valuation on both).

So what is my LVR? can you show me how it's done?
Is it loan = $200k + $740k?
Security = $650k?

What does APM stand for?
 
STAHP!!!!

Don't sign anything. It sounds like you're going to cross-collaterize. This may be un-necessaryand will probably cause you problems going forward. Search the forum for more info.
 
STAHP!!!!

Don't sign anything. It sounds like you're going to cross-collaterize. This may be un-necessaryand will probably cause you problems going forward. Search the forum for more info.

Cross collaterize? That means if this investment fails i lose both houses?

How can I only use one as security? will it work?

HALP!?

Can someone pro explain my options?? :confused:
 
Ok are you dealing with a broker or banker? They are cross securitising the properties which means they are linking the properties.

You need to set up the loans as standalone facilities as follows:

Property A (Value = $600k):

Loan 1 = $200k (purpose - Property A)

Loan 2 = $180k (purpose - Property B)

LVR = 63%

Property B (Value = $740k):

Loan 1 = $589k (purpose - Property B)

LVR = 80%

Regards

Shahin
 
Firstly, you may not be crossed, you just want to be sure.

Cross collaterize? That means if this investment fails i lose both houses?

Probably not THAT drastic, more like if you try to sell either or draw more funds the bank will slow you down drastically or charge you fees or both.

How can I only use one as security? will it work?

You'll find plenty if you search. Ideally in your situation, you want to end up with 3 loans: 1- your outstanding PPOR loan. 2- A new loan secured against your PPOR to be used as your deposit. 3- your new loan, secured against the IP, to the balance of the purchase price. This keeps your loans and securities all clear of each other.

Also, I just re-read, and you say 'I have $100k in my current homeloan that I will draw out." if you re-draw, this isn't tax deductible. If you create a new loan, it will be. And you can probably borrow more than $100k to get you to 20% deposit and avoid LMI.
 
Aaron, how do you infer that it's cross col? Because it's 85% LVR, doesn't require a val and there's no mention of LMI (which for this size loan should be big enough to send the OP's head spinning 360 degrees)? Or just because you know that's how CBA operates?
 
what the others said,

But dont worry, you will be Lucky :) with the 5.40 rate

Lenders often dont do vals for EXACTLY the same reasin youd like to do your own easement search.

Personally, if you were my client Id force a val, and it costs all of 99 bucks.

Why ? SANF for nervous nellies incl me, I dont want my clients buying stuff that isnt going to serve them long term.


ta
rolf
 
Also, I just re-read, and you say 'I have $100k in my current homeloan that I will draw out." if you re-draw, this isn't tax deductible. If you create a new loan, it will be. And you can probably borrow more than $100k to get you to 20% deposit and avoid LMI.

I don't agree. If it's redrawn from the loan, it's a new borrowing. Used to purchase an IP, it's deductible.
 
Aaron, how do you infer that it's cross col? Because it's 85% LVR, doesn't require a val and there's no mention of LMI (which for this size loan should be big enough to send the OP's head spinning 360 degrees)? Or just because you know that's how CBA operates?

Yes. He/she said the loan is $630k and the value of the property is $740k so we are talking LMI and it is extremely rare that a lender will not order a val when a deal is in LMI. They have done a desktop val on the property and there was plenty of equity there which has later become evident.

It is without a doubt cross securitised which is a shame due to the decent equity sitting there.

Regards

Shahin
 
Aaron, how do you infer that it's cross col? Because it's 85% LVR, doesn't require a val and there's no mention of LMI (which for this size loan should be big enough to send the OP's head spinning 360 degrees)? Or just because you know that's how CBA operates?

Hi Alex,

OP says his/her house is worth $650,000, and the new place is now bought for $740,000, so it's worth about $705,000 before stamps. That means total loan is original $200,000 plus $740,000 which is $940,000. Total value of securities is $650,000 + $705,000 = $1,355,000.

$940,000 / $1,355,000 = 69% LVR. It is crossed.

I said CBA because I got this gut feeling.
 
I don't agree. If it's redrawn from the loan, it's a new borrowing. Used to purchase an IP, it's deductible.

I think so too but I want it all neat and tidy.

How should I go about it?

I have to email CBA mobile banker tomorrow.

What should I put in the email.

Also what does LMI stand for? and AMP?
 
Hi Alex,

OP says his/her house is worth $650,000, and the new place is now bought for $740,000, so it's worth about $705,000 before stamps. That means total loan is original $200,000 plus $740,000 which is $940,000. Total value of securities is $650,000 + $705,000 = $1,355,000.

$940,000 / $1,355,000 = 69% LVR. It is crossed.

I said CBA because I got this gut feeling.

Just to make it clear: It is CBA. rate is 5.4%. My current homeloan is -$200k but there is $100k cr sitting there coz I made extra repayments.
Current house: $650k, IP is bit under $720k + $20k stamps.

I'm not dealing with a broker.

So there is no way to set it up like how Shahin mentioned it on page 1, 8th post?

I just want to be able to keep the investment in one neat account with all costs and interest in one place so it's easy come tax time. Is this possible?

I currently have a MISA account (offset) and a homeloan account. Do I get another homeloan account? like Homeloan 2 and MISA 2?

What should I put in the email to the bank?

1. I ask them if it's possible to not cross security?
2. make my account neat so i can put exactly what the interest is so I can deduct it from my income?
 
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