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Lenders that allow loan variation with val re LVR

Discussion in 'Property Finance' started by dabbler, 16th Oct, 2016.

  1. dabbler

    dabbler Well-Known Member

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    Hi All,

    What lenders allow a loan variation to the interest rate when a val is done and LVR drops.
     
  2. tobe

    tobe Well-Known Member

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    The ones that you ask?
     
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  3. dabbler

    dabbler Well-Known Member

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    Nope, some def do not allow.
     
  4. tobe

    tobe Well-Known Member

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    Lol. Well it costs them money doing your val and then you ask for a discount! Did you try sending them a discharge request form?
    Lots of lenders charge a premium variable rate for investors, interest only and with lvrs over 80. Many investors especially starting out want to stay above 80lvr anyway, and don't want to be p&i. If they knew their lvr had fallen below 80 they would probably prefer to stick with that lender and use the lmi premium already paid to access equity again anyway.
     
  5. tobe

    tobe Well-Known Member

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    Most of the large lenders have individual pricing now. Get a broker to load a pricing request for you and see if you get a different result.
     
  6. dabbler

    dabbler Well-Known Member

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    Hi tobe, that is not what is being asked to be discussed.

    The valuation policy also differs between lenders. This would be a worthwhile discussion as well.

    I also think it is unwise to threaten with a discharge.....especially if you have no loan with some lenders, they may laugh :)
     
  7. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Most lenders will allow this. Some are substantially more generous with renegotiated rates than others.
     
  8. tobe

    tobe Well-Known Member

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    fine, then the correct answer to your first post is, all the lenders that allow individual discounts will 'say' they can vary the interest rate if asked when the LVR has dropped. This is most of the big four and their subsidiaries, and quite a few of the smaller lenders.

    On valuation policy, no lender has a policy of re valuing existing clients, without an application from the client for more money. For some lenders brokers are authorised to order upfront valuations, which are either short form full valuations, kerbside or desktops. Lenders each have systems in place that choose which type of valuation is acceptable. A very few lenders will accept the valuation noted on your rates notice. Many lender now accept the contract of sale for purchase applications when the deal meets other LVR criteria.

    Sending in a discharge request can focus a lenders mind on discounting for existing customers. Many lenders don't authorise branch or ordinary staff to do the same level of discounting the retention team staff can. Lenders wont discharge your mortgage 'by mistake' if you are bluffing, and haven't actually got a new mortgage lined up.
     
  9. Colin Rice

    Colin Rice Mortgage Broker Australia Wide Business Member

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    I would guesstimate 80% + of lenders will entertain a reduction in rate based on an improved LVR sub 80%.

    If you have previously paid LMI and your situation suits then consider a top up :)
     
  10. dabbler

    dabbler Well-Known Member

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    I know NAB specifically allows valuations as part of the loan contract IIRC

    It is a bit hard to spell out everything on a forum, but thanks guys for any replies.

    Ok, that makes sense & was basically what I was trying to find out.

    I have done the re value then lowered the rate, but I hit a road block with one, was at 90, re val was easy under 80LVR yet, if I did take any money, the offer seemed to be the original loan rate would stay the same at the 90 rate.

    With another lender they were hard nosed over rate variation too, asked broker a few times is we could re val and never got any actual answer, in between lender has now offered a better rate just for asking without a val.

    regarding discharge, yes, am aware of the process and they wont accidentally discharge if forms sent (which is a shame...lol)
     
  11. tobe

    tobe Well-Known Member

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    Brokers only get paid for settling loans. Many brokers might not want to do 'work' like ordering a valuation, or doing new pricing without getting paid. Many brokers see it as part of their service proposition as it means that client you did the right thing by (worked for free) might come back later and give you some paid work, or might tell their friends etc.

    Personally, as an investor, I would suggest being more focused on researching the next purchase, or pushing up rental yields, or getting to a better position for the next top up rather than focusing on rate. Miss the forest for a tree. be different.

    Every borrower (OO and investor) wants the lowest rate. trouble is chasing rate means losing other opportunities, like the best structure, or new investments that return a lot more than the rate differential.

    'Its not about rate' seems to be a theme on this forum in any case, so Ill get off the horse now.
     
  12. dabbler

    dabbler Well-Known Member

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    Hi Tobe, I have used a broker for all loans for the last 20+ years, I stopped going to the banks after the recession we had to have.

    Broking has become very complex, I can see that, anyway, what I am saying, is I am not new to this, I also see you are a broker, sorry, was not fully aware of that with your first reply.

    All of us are different, for me now, it is about the rate & product, I have spent the last year working on existing loans to make things more in my favor, some of us are low income, so if you manage all the outgoings and watch everything it can be very worthwhile.
     
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  13. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    If you're wanting a lower rate as a priority, without refinancing, the fixed rates might be your best bet - the 2 years are good at the moment.