Refinancing a discounted property

Hi all. I've found this ground floor apartment which has a very awkward floor plan. It's been 2 years and no one has bought it. If I manage to buy it at a discounted price, how will the bank value it?
So, this place is about $430k. If for some miracle, I manage to buy the place for $300k, and get a loan for it, the bank will value it &300k max, right?
And if I refinance it a few months later, how will the bank value it? Will it vie it based on market value, or based on my purchase price?

Reason I'm asking is because I am hoping that buying it at discount will give me immediate equity so that I can use it to do some Reno so that the layout will be more functional. Then sell it.

Thanks in advance.
 
Lenders usually will use the val or sales price, which ever is lower.

Typically to get the best Val's result we need to usually switch lenders

Ta
Rolf
 
On purchase the bank will finance based on the lower of the valuation or purchase price.

In all likelyhood, on revaluing the property the valuer will see the original purchase price and this will heavily influence their result. You may be able to help this a little by showing them comparable sales of other similar properties that have recently sold. Don't bother with properties that are on the market (haven't sold yet) and don't bother with properties that look like yours with the renovation completed. Give them honest apples to apples comparisons.

Vendors don't simply discount a property by 40%. You may have gotten a bargain, but their original asking price of $430k was likely a grossly over inflated pipe dream.
 
Hi all. I've found this ground floor apartment which has a very awkward floor plan. It's been 2 years and no one has bought it. If I manage to buy it at a discounted price, how will the bank value it?
So, this place is about $430k. If for some miracle, I manage to buy the place for $300k, and get a loan for it, the bank will value it &300k max, right?
And if I refinance it a few months later, how will the bank value it? Will it vie it based on market value, or based on my purchase price?

Reason I'm asking is because I am hoping that buying it at discount will give me immediate equity so that I can use it to do some Reno so that the layout will be more functional. Then sell it.

Thanks in advance.
if it is heavily discounted, a new valuation can be done within 1 month...if it's discounted by 10% or less than usually wait min 3 month for this new value to be recognised.

As rolf mentioned, may need to do a refinance to a diff lender, possibly...

Also what pete says is correct, so i would take that advice inconsideration when you carry out your due diligence.
 
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