Contract price or valuation?

Hi All,

I have a few loans with commonwealth bank and I know that even if you buy land/property off the plan, CBA will always provide you a loan according to the either the contract price or valuation, whichever is lower.

However, I have now heard from someone that some other banks such as ANZ will provide a loan according to the valuation.

For example, if valuation comes in for off the plan land at $700,000 but contract price of $500,000 they will provide the loan at 80% of the valuation. Is this true?

Can some people please shed some light on this?

I look forward to some replies. Thanks everyone.

 

Quite a few will do this if the contract was signed more than 12 months ago.

 

Thank you for replying.

So is it true providing the contract was signed 12 months ago or more?

Thanks.

 

Yeah it's true.

Anz might even be 6 months.

Macquarie and possibly ING will also consider.

 

Thank you for replying.

Never going win CBA again. My property appreciated a lot more since the contract date and they would only provide 80% of the contract price.

Never again.

 

All banks have their quirks. Don't be surprised if you say the same things about the next lender at some point

 

What if contract value is 30-40% below val? Will it form somewhere in between?

 

Generally they won't lend more than 100% of the contract price. Years ago you could even get more, even cash out - the good old days when you could buy a property, have instant equtiy and cash in your pocket.

 

Yeah, I forgot about a few discussions that I had with a valuer where the previous vals on a devt site were 50% above realistic, bank loaned funds & developer is now 3 times removed from the equation.

 

Nothing stopping you getting a reval and equity release directly after settlement.

All the lenders policies have their place, there is no one perfect lender unfortunately.

 

CBA allows for the increase value as long as the OTP contract is over 12 month + you need to ask before you submit with CBA.

There's a few that takes the increase value for Off the plan- ANZ, ING etc..