Determining valuation when borrowing from a new lender

Hi all, I have 8 propertys with borrowings at below 80%lvr on all loans, the loans are spread across 3 lenders. Some propertys have not been valued in a few years so i would presume they have all grown in value by a little amount.

My question is, if i purchase another IP with a new lender that i have not used before will the bank just go off the valuation figure that i give them when filling out the loan application?

Im curious as to how this works, what stops a borrow over estimating property values on existing propertys that have borrowings with a different lender? And do the bank just take the valuation you give them or will they just go off the median price for that suburb

I will be using cash savings for a deposit on this new loan with a lender that i have not used in the past and leaving the other loans where they are as I am happy with the way they are ATM

Would appreciate any thoughts

 

The new lender will commission their own valuation.

 

Do you mean the valuation for the new property? Or the existing properties? If you're talking about the new property, the lender will do a valuation anyway. If you're talking about the existing properties, you will estimate the values in the loan application. If they are reasonable estimates they won't worry to much about looking any further. If inflated unreasonably, they might ask for an explanation or may not.

What will be scrutinised though is the loans associated with each property. You will need to provide statements showing balances to confirm total debt levels to ensure you can service your loans.

 

Thanks for your comment George, yes i was referring to the valuations of the existing propertys only.

 

Generally they don't care enough to order valuations on your other property values - it doesn't really feed into servicing or the application, so they're generally happy to take your estimates. The rental income and the debt expense are key figures in servicing, and hence they scrutinise this and require supporting evidence (usually).

 

Usually go off your estimate - some will do a desktop to confirm your estimate is within range.

They're more concerned about the value of the property they're financing.

Cheers

Jamie