Revaluation

[cimbom]

Hello,

Just wondering how influential recent sales are for revaluations and how close valuers prefer the houses to be in terms of location and the interior/features of the house when comparing.

The house directly across the road from our PPOR was sold recently for a bit more than we paid for ours last year. It is pretty identical to our house with the main difference being we have a nicer/newer bathroom. If I add say 10k to their price to account for the bathroom, this is just under 10% more than what we paid.

If we revalued, what is the likelihood of getting this as the result? There are a number of other sales within that range but I thought that'd be the best one to use as it's a very close match. Also, if we revalued, what's the likelihood of getting part of the LMI refunded?

Thanks

 

[Jamie M]

Hey cimbom

They usually go off at least three comparable sales.

So whilst that one might support a higher val - there could be some other recent sales that don't.

Also - if you do get a reval done, you'll need to mention that recent sale to the valuer because the sale may not have been registered yet (depending on how recent it was) so there's a chance the valuer may not know about it.

Cheers

Jamie

 

[cimbom]

Thanks Jamie. There are two that sold for that exact same price that are very similar to our house (including the one across the street). There are another two that sold for a bit less but would need more work to be closer to the first two (kitchen, flooring, etc).

 

[tobe]

the likelyhood of getting the LMI refunded is 0%.

The likelyhood of getting an increase in the valuation depends on the valuer, the bank, and how long it is since you purchased.
Valuers have a 10% variance allowance, so even if they use the sale across the road, they may not increase your valuation.

 

[Jamie M]

Thanks Jamie. There are two that sold for that exact same price that are very similar to our house (including the one across the street).

Cool - if your current lender allows for upfront valuation then there's no real harm in getting one.

Agree with Tobe on the LMI refund though - ain't happening.

Cheers

Jamie

 

[cimbom]

Thanks. I had read somewhere of people getting LMI partially refunded when the LVR was reduced but maybe I misunderstood. Good to know anyway

 

[Aaron_C]

Thanks. I had read somewhere of people getting LMI partially refunded when the LVR was reduced but maybe I misunderstood. Good to know anyway

In the old days, yes. Not anymore though.

 

[Rolf Latham]

Thanks. I had read somewhere of people getting LMI partially refunded when the LVR was reduced but maybe I misunderstood. Good to know anyway

better to gear the next bit of lmi supported cash draw into another property OR buffer, assuming you are a Portfolio builder.

if one is a ma n pa home buyer, of course the attempt at a lmi rebate makes sense, but I know of no lenders that will entertain same.

ta
rolf

 

[Redom]

Cimbom, i'd just get a broker to order an upfront val for you and check it out. I've seen a number of positive surprises (and negative) with valuations and they really do vary from valuer to valuer.

You could get lucky and it may come out even better than expected. Some valuers will take 20 minutes to view individual features of your house, others will do a quick walk and tick and flick. Results can vary greatly.

The previous sale should play a role in determining the value of your property.

As Jamie mentioned, if you can avoid putting an application in (depending on the lender), then its a relatively costless exercise for you.

 

[cimbom]

Another random question - if the revaluation came in at a good amount (enough they we could refinance without paying LMI again) and we then withdrew some of the equity afterwards, would LMI become payable again? The difference to the LVR would be ~2%

 

[Jamie M]

Hey cimbom

Are you talking about a refi to another bank - and then borrowing above 80% with that new bank?

If so - a new LMI charge will be payable with the new bank.

Cheers

Jamie

 

[cimbom]

Yes, so if the valuation came in high enough that ordinarily LMI wouldn't be payable. But afterwards, I withdrew a small amount of equity that would push it slightly above this limit, would I then need to pay LMI as well? Hope that makes sense

 

[Jamie M]

Yeah you would.

If you've refinanced to another lender - and then borrow above 80% you'll pay a whole new LMI premium.

If you stick with your current lender - and refinance above 80% later on, they'll take into account the LMI fee you paid previously, which means a lower LMI charge.

Cheers

Jamie

 

[tobe]

there arent any LMI loop holes anymore.

Previously you could get away with what you described with a couple of lenders, that is fiance to 80% then do a top up to 90% later and only pay LMI on the top up amount.