Valuation higher than purchase price

[Jack3d]

Hello all, I just have a quick question about financing.

I make an offer on a property, it is accepted then I get unconditional approval (after valuation). If there are issues with the property or for whatever reason the offer is withdrawn before exchange and a offer 10K less is offered and accepted later on.

Ok so my question is, since the original offer was approved unconditionaly by the bank, this means that the valuation was ok? Now that the price is 10K less than the oringal price is it possible to get that extra (or a portion of it) in cash, on top of the loan to do some fixing up of the property?

 

[Aaron_C]

No the bank will just take the lower of purchase price or val.

 

[Jamie M]

Agree with Aaron.

Only exception I can think of is when it's an OTP purchase and the contract was signed longer than 6 months before settlement.

In those circumstances you might be able to go off the val if it comes in higher than purchase price (but this doesn't apply to your situation).

Cheers

Jamie

 

[Marty McDonald]

If there is a change in price you need to let the bank know ASAP . If the transfer price is different from the original purchase price you will have a problem and loan will need to be re approved and re-documented if lmi is involved. The bank will find out right at the end just as they go through the final checks.

 

[Redom]

Agree with Marty - best to let the bank know at the outset if there's been a change. It could cause some last minute hassle that's easily avoided.

In answer to your question, won't be able to 'borrow that 10k', even if the valuation has come back higher and that the 'original' purchase price was 10k more.

Bank will see final COS in their final checks. Hence, its best to let them know sooner rather than later.

Cheers,
Redom