We put down a 10% deposit (using a deposit bond) on our house+land package in the middle of 2007. To get the deposit bond we needed full loan approval and hence had to get the valuations done at that time.
We are now waiting for the land to be registered - late March hopefully! In the meantime the value of the land has risen nearly 20%
and I suspect the end-value by even more.
Yet the bank determines its LVR on the basis of the lower value between cost and valuation. Hence, our mortgage insurance will still be based on a 95% lend (COST) instead of a 90% lend (CURRENT VALUATION) or even lower if the projected end-value was used. This, of course, is costing us many dollars.
I understand why the end-value can't be used as it is a projection and therefore may not be realised. However, why not the current value, particularly on deferred settlemments?
I know, there are other forum members who are waiting for land registration and who may have, hopefully, have also realised capital gain while waiting. I was wondering if your banks were doing the same or should I be shopping around?
_Al_
enigma_brennan
