Bank Valuation Short!!!! what to do??

so in plain English;

We have bank and non bank lenders who still offer NO DEPOSIT home loans to first home buyers, and (some) investors at low interest rates (basic or discounted interested rates). Also available for land purchase with NO DEPOSIT.

thanks thlo. Finance is not my strong point since I've retired Brain getting a bit old and rusty.

The Law Society's position on real estate rebates is clear; The rebate itself is not the problem – the possible deception is. The Ethics and Property Law Committees have warned of the dangers inherent in these sorts of situations. Risk in breaching the Fair Trading Act, the Trade Practices Act, the Legal Profession Act and even the Crimes Act.

If your loan amount is close to your property value don't refinance or consider moving your loan to someone else. Sit tight.

Well said!

Well after being weeks of depression thinking we may have to wait another 6 to12 months to start our building dream I'm happy to say we have secured finance through another lender who's valuation has come in at what we are paying for our House and Land.

Party Time... I didnt think I wouldbe this happy getting into sooo much debt.

Cozmo - that's great news! Congrats!

Cozmo, that's great news! we always see big differences in valuations too. It just demonstrates how subjective a process it is.

That's really damn!!! May I ask you at which stage will that evaluation from the bank kicks in? I'm looking for a house/land contract now, and if I am $20K short, I will go broke before anything happens as I have no buffer myself to pay for any of this!!

Generally when you get conditionally approved, will do a valuation, you'll have a cost of the house your building and the land cost, they then go and do their own cost, sometimes it doesnt match, that happened to us, and we had to pay the different from our own pocket only because we were so close to land settlement too hard to get financial else where!

Our steps were pre approved (basically just saying based on what you earn and what your debts are you can borrow this much), then we got unconditionally approved (send pay checks and other items, they confirm you can get finance), then conditionally approved (they agree with the land and building contract and the cost to build it).

Well done Cosmo what a relieve

oops! woodsey's made a mistake.

wallacetai, the bank does the valuation after your conditional approval and once satisfied with the value (as well as any other conditions) and that the property is acceptable for lending, it issues your unconditional (also known as formal or final approval) approval. well before you proceed with the construction.

***moved***

Hello Matt, you're just making Home Finance more popular by moving all these threads here.

Revival of an older thread!

Hi all!

I am new to the housing market, and have a quick question regarding valuations.

Heres the story:

My fiancee and I have recently put down a holding deposit on a house and land package (duplex). We have a conditional loan approved from CBA for 90% of the purchase price. I received some startling news from our solicitor who we think is acting in our best interests. According to our solicitor he feels we shouldn't go through exchange with the vendor without receiving an unconditional approval from the bank. With this being said, the bank says they cannot value the property till time of settlement. Our solicitor has then told us that if we proceed we do run the risk of receiving a value less than the 90% borrowed, and if that happens we could either be denied the loan (and lose our deposit), or have to pay the Gap... I have asked our solicitor to speak directly to the lender at CBA to see if we could possibly get a valuation done with just the plans / list of inclusions / copy of the contract of sale..

So confused... why does the bank have to make it so hard!

Any input is greatly appreciated.

Cheers,
Alfy.

Hi Alfy

Will you paying for the property once it is complete or are you making progress payments to the builder? Judging by your comments it appears you only pay for the property once it is complete and titles are registered.

If you are paying for it when it is complete (i.e. off the plan) you should be able to obtain an unconditional approval from CBA as long as it is due to complete within 6 months. If you were borrowing less than 80% of the purchase price, so no mortgage insurance is involved, I believe they can allow approvals 18 months out from completion. I have done this in the past with clients purchasing off the plan units and unless they have recently changed their policy I don't see any reason why you can't still do this. You just need to send in the plans and specifications and the valuer will be able to do an on completion valuation.

Approximately six weeks prior to completion of construction the bank will reconfirm servicing capacity and Loan to Valuation Ratio.

I suggest you speak to CBA again and ask them to clarify their off the plan policy.

Cheers

Thanks for the info

Update:

Spoke to the solicitor who then spoke to CBA and now they CAN do the valuation.. It's called an "as-if" valuation as it will be valued off the plans / specifications / inclusions etc. This was said to me last Friday, and I was advised that it could take 1 week for a valuation (still patiently waiting..) Hopefully it comes in today or tomorrow, so that we can finally get some grounding! We are borrowing 90% so we automatically require LMI which is no big deal.

*fingers crossed*

can someone help me with these questions

i have a loan approved with CBA, i have signed documents etc and my loan account now appears on my netbank. what is the maximum time allowed before I start drawing the loan for construction??

generally when you do settlement, I have to settle for land when it becomes available coz it is still being developed, will they require payslips etc

to sum it up, what problems can i expect to run into with the loan, during the various drawings I will do?

i am a worried first home buyer