Good luck with Bank of Melbourne, if not, i'd do what Dreamz said. Find a good reputable broker, see if he can recommend a bank that'll be more lenient, and maybe even look into a private valuation and see what they value it as.. at least you'll have more to back your argument up if you've got a private valuation much higher than the banks.
No they valued the land and house as a separate. I went to some other banks and they said they have to do credit checks first or pay $800 for valuation only. I dont want any more credit checks.
I have decided to cover it with my own money as i am in hurry and dont want to mess this all up. Land is titling in next 2 weeks. Our loan is very complicated so getting it done as it is. Less loan is always good. Decided to do post handover things slowly as we earn.