Browse Forums Building A New House Re: Valuation problems . . . please advise!!! 3Jun 10, 2007 12:32 am Hi Louise,
I can't offer any real help or advice I'm afraid, but I certainly can empathise. I built our home about 10 years ago, and the memory of details is a bit fuzzy, but we had the same problem. It sucks that the banks treat us all like they have us over a barrell as they do. We designed ourselves a smallish home that on paper looked modest. Got a few quotes to build it, and the banks had the same attitude. They failed to see the value of the many quality features we had planned that made the quotes quite reasonable. We ended up taking some things out, (skirtings, garage door, patio and a few bits & pieces) to meet the budget. 10 years later, and we have added some, but not all of those things. I can only suggest that you find a trusted mortgage broker and shop around for a lender that is more reasonable. Best wishes with it all! Ash. Re: Valuation problems . . . please advise!!! 4Jun 10, 2007 8:42 am Hi Louiseos,
I really feel for you because my partner and I have just gone through exactly the same thing. We went with large bank A, via a broker for the land and 2 months later when we submitted construction plans, they valued the total house / land package at almost $90k less than we required...even taking into account the cash we were putting in. After loads of stress, arguing about whether or not all the extra we put in added value or not, broker advised us to go with large bank B for another valuation and they came in only $10k under.....we were able to fund the extra so problem solved. Unfortunately, that meant we had to pay the deffered establishment fee to large bank A to closeout that mortgage. It all comes down to the valuer the bank uses. Some will simply use a formula of postcode X sq M to come up with the value. The large bank B valuer (he was independant) actually provided a written report comparing 5 or 6 houses in the imediate area that were either up for sale or recently sold. Shop around, there are plently of other banks out there. Re: Valuation problems . . . please advise!!! 5Jun 10, 2007 9:34 am Quote: Some will simply use a formula of postcode X sq M to come up with the value Who on earth did you get that piece of information from? Property valuers don't go to university for four years to learn a simple formula, and undergo professional development by the Australian Property Institute. Property valuers should look at the following when arriving at the valuation; * land and title; * location; * site description and services; * town planning; * improvements; * environmental matters; * comments on the property; * basis of valuation including valuation rationale or approach and sales evidence; and * market review or summary I'm in no way a mortgage consultant, but if a bank was to loan you more than what the house and land was worth, and you happened to run into financial problems, how is the bank expected to reclaim what is owed to them. Is over capitalizing. Whoa, now reading that I seem harsh! I don't mean to be, but valuers don't just use a simple formula, they are also liable to give a correct measure on the value of your property! Re: Valuation problems . . . please advise!!! 6Jun 10, 2007 10:22 am 1 word!
(not delfin!! ) Broker... You will need a non standard lender if the bank says no. Re: Valuation problems . . . please advise!!! 8Jun 10, 2007 10:31 am Usually lower or the same.....not generally higher
Non conforming = higher (bad previous credit etc) Re: Valuation problems . . . please advise!!! 9Jun 10, 2007 10:31 am Hi newhomebuilder,
There's no other way to explain a difference of $90k in the valuation. Both were from large banks, the higher valuation had supporting documentation the lower did not. My response was to someone asking about other people's experiences and this was ours. The emphasis was on "some"!! Cheers Re: Valuation problems . . . please advise!!! 10Jun 10, 2007 10:39 am mattwalker Usually lower or the same.....not generally higher Non conforming = higher (bad previous credit etc) If non standard lenders have lower rates and more flexability, where's the downside? I guess banks have better offset accounts and other services, but in the end all that matters to me is the interest rate. And if a lender is more flexible, all the better for me - but I guess then I've increased my risk if the property market goes further down or I loose my job and the value of the property goes below the loan amount. Re: Valuation problems . . . please advise!!! 11Jun 10, 2007 11:46 am Another thing that comes into consideration is that the bank may well work on the postcode system which dictates whether they lend 60,70, 80%,or higher.
The bank is insured for the loan by an insurer and they dictate these things to the lenders,not the other way around e.g Bank will only lend 65% for property costing $200,000 in SanRemo,but same home and price in Cranbourne, will lend 90% Have you considered starting with a smaller house and extending later as property valuations catch up Re: Valuation problems . . . please advise!!! 12Jun 10, 2007 8:59 pm Grime has hit the nail on the head.
Most bankers (when considering pre approval) will only look at how much you can borrow, not where. If you enquire, I guess that you will find that Lancefield is not in the high percentage category - security wise. At any rate it is not up to the bank to determine what percentage you can lend, as they can lend out to a standard 80%. If the loan amount is over that then they pay a premium to a provider (an external agent like GE Mortgage Solutions) to allow the bank to lend outside of their standard allowances - for anyone who has a loan that is over 80% check your finance contact for the (LMI) Lenders Mortgage Insurance premium. Now for the nugget - if all else fails try an unsecured loan or a 2nd mortgagefor the balance. A mortgage broker can assist you with this, or as Matt put it, try a non standard lender - Fox Symes or someone like that. Re: Valuation problems . . . please advise!!! 13Jun 10, 2007 9:10 pm Hennig Grime has hit the nail on the head. Most bankers (when considering pre approval) will only look at how much you can borrow, not where. If you enquire, I guess that you will find that Lancefield is not in the high percentage category - security wise. At any rate it is not up to the bank to determine what percentage you can lend, as they can lend out to a standard 80%. If the loan amount is over that then they pay a premium to a provider (an external agent like GE Mortgage Solutions) to allow the bank to lend outside of their standard allowances - for anyone who has a loan that is over 80% check your finance contact for the (LMI) Lenders Mortgage Insurance premium. Now for the nugget - if all else fails try an unsecured loan or a 2nd mortgagefor the balance. A mortgage broker can assist you with this, or as Matt put it, try a non standard lender - Fox Symes or someone like that. Hopefully unsecured or 2nd mortgage loans are still at home loan rates, otherwise circumventing the bank's financial prudence will be doing yourself a disservice. Do you get the impression I hate paying more than the minimum possible inerest rate? And to hell with quality and service - I've discovered that the quality is the same and all money comes from the same place, regardless of retailer Re: Valuation problems . . . please advise!!! 14Jun 10, 2007 9:19 pm Yeh, so true.
Doesn't matter which one you're with, you're a number just the same. The last call I got from the banker I borrowed through was to let me know he'd left the bank and gone out to be a broker - and did I want to move banks? Go figure. Re: Valuation problems . . . please advise!!! 15Jun 10, 2007 9:29 pm I think I might need to qualify what I said earlier.
Try a non standard lender - like RAMS or Aussie etc. I would never go to a Fox Symes for anything unless it was an emergency... I had been with St George Bank for 14 years prior to refinancing for a renovation 4 years ago. The valued the house that we lived in about $50,000 less than fire sale value 4 years ago. We asked for a reappraisal and were told taht was not the banks policy. OK !! Rang RAMS and the valuation came in at a whopping $120,000 more than the bank. This was still a little less than the value the property would realise on the open market. Within 2 weeks the house was refinanced and we had changed to a "non standard" lender. Matt Note: We are now with the Commonwealth Bank due to changed circumstances with construction loans etc. Re: Valuation problems . . . please advise!!! 17Jun 10, 2007 9:54 pm If you are not happy with the valuation then you are within your rights to request another one. Someone else on here did it with a positive result, I will try and find the thread for you.
I don't have a nice thing to say about Rams, we have been with them for 9 years and can't wait to give them the boot after our recent treatment from them. ETA: here is the link https://forum.homeone.com.au/viewtopic.p ... highlight= Re: Valuation problems . . . please advise!!! 18Jun 10, 2007 10:00 pm RAMS would definatley not be my first choice either , but they helped us out at the time and were very accommodating.. Re: Valuation problems . . . please advise!!! 19Jun 11, 2007 9:00 am Its worth mentioning to that its harder to value a block of land and a fistful of drawings.How does a valuer determine the final outcome without lots of guesswork Its much easier and accurate once building is completed, so block and plan valuations tend to be valued lower.
The other item re percentages is I believe based on population figures e.g. were I live was 80% a year or two ago but is now 100%. And yes try Wizard,Aussie,or Rams. Re: Valuation problems . . . please advise!!! 20Jun 12, 2007 10:50 am I there
yes try a broker interest rate is not always higher but we very careful about which one you use or which mortagee company or bank .Over the years I have been with a few and have a story about most. Are you borrowing for the house and land together or do you own the land a I hope I donot have that problem as we are soon to sign a contract and then the bank has to go value it to. I am looking for someone who might have tackled a similar issue as me. I have a few rendered interior walls, the surface condition is hardly flat. I can see all the bumps… 0 7961 I am not a brick expert, but rendering would be 1 option, it would be costly to do the entire house though.... 2 6677 Hi all, has anyone been ask to do the weeds in their property while in the middle of build? We are under the impression that they are in control of the site while they… 0 2764 |