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Off the plan investment finance advices pls

Discussion in 'Property Finance' started by Clairal, 15th Dec, 2015.

  1. Clairal

    Clairal Member

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    Hi all,

    I bought an investment off the plan property in Melbourne which is going to settle soon. The bank my broker recommended (BankWest) gave an evaluation of 50k+ less than the purchase price. They recommended trying ANZ which may get a better evaluation but higher rate. Any advices on this? I dont wanna lock more cash on an investment property.

    Thanks in advance!
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    ANZ allow up front valuations so best to get a valuation first, via your broker ordering one thru ANZ, and take it from there.
     
  3. Scott No Mates

    Scott No Mates Well-Known Member

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    What are your choices?
    • Default & don't settle
    • Put more $$ into the deal
    • Pay slightly higher interest rate (how much more is this really going to cost)?
    Is rate the biggest issue for you or do other things like offset, redraw, flexibility, lender policy play any part in this decision?
     
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  4. Clairal

    Clairal Member

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    Thanks. I dont really need offset. Just wanna get a bigger loan. Any other recommendations about banks with a better rate and better evaluation?
     
  5. Jason Tyrrell

    Jason Tyrrell Well-Known Member

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    Lender use independent valuations. It is not a case of some being more conservative than others...and even then, individuals doing the valuations, so you never know.

    As Terry suggested, ANZ do upfronts so maybe worth doing and going from there. A contract price valuation will give you peace of mind at least. Others like NAB etc will as well.
     
    Last edited: 16th Dec, 2015
  6. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    It is not hte bank, but the valuation that seems to be the problem.

    Many lenders allow upfront valuations so it is a matter trying a few to see what valuations you can get.
     
  7. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    I'd order a couple of upfront vals with different lenders - hopefully they end up with different valuers. ANZ and Mac will go off the valuation amount if it's higher than purchase price (although that doesn't seem likely here).

    Cheers

    Jamie
     
  8. Redom

    Redom Mortgage Broker Business Member

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    ANZ, NAB, Macq, CBA, BoM etc all do upfront valuations - best to order quite a few of them and go from there.

    Hopefully you get different valuers - that should help bridge that shortfall as one may have the opinion that it is worth the purchase price.

    Given you know the issue, its very important to avoid putting in applications with banks and then have them rejected (or lower funds available) based on valuation issues. You'll destroy your credit file if you try this too many times and you may lose the option to shop around for valuers then (e.g. you won't pass credit scoring with the majors).

    Cheers,
    Redom
     
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  9. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Other lenders that offer upfront valuations (there's probably a few I've missed):

    * ANZ
    * Bank of Melbourne
    * CBA
    * ING
    * Macquarie
    * NAB
    * Westpac

    I did initially think that ANZ is being recommended as they'll often simply use the contract of sale to indicate the purchase price, but that's probably not the case here as the property is interstate from yourself. I suspect your broker is now recommending the ANZ for some policy reason regarding your circumstances.

    I'd be looking at which is the next best lender to suit your circumstances and order a valuation with them. If it comes back with a similar price to the first, I don't expect that a third or fourth valuation is going to really help.
     
  10. Clairal

    Clairal Member

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  11. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    @Clairal you can only get a 100% loan if you've got equity in another property. It should structured properly to ensure the two properties are not cross collateralised. This topic gets discussed at least once a week here.

    If you don't have any other property, the most you can borrow is about 90% of the property value (there are some exceptions to borrow up to 95%, but they're extreme exceptions).
     
  12. Clairal

    Clairal Member

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    Hi Peter,
    I have another property that I just bought two months ago for 520k, got 80% loan and about 230k in the offset account. Servicing isn't going to be a problem. My annual income is above 150k. Do you think in my case any bank will lend me more than 80%?
     
  13. York

    York Finance Broker Business Member

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    It is possible depending on other factors. You should be aware that a lend over 80% will attract LMI (Lenders Mortgage Insurance) in most cases. As Peter mentioned there are some industry professional that lenders may offer a higher LVR to. Being on a high income (about 150k as you have mentioned) you may qualify depending on your profession. Can you specify which industry you are in? This may help the brokers give a more accurate reply.
     
  14. Clairal

    Clairal Member

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    I'm an IT contractor.
     
  15. tobe

    tobe Well-Known Member

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    Bummer.
     
  16. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    You can borrow more than 80%, up to 90% in most cases. You'll pay LMI if you borrow more than 80% of a properties value.

    I'd be using some of that cash in the offset account, but there's other strategies to employ as well depending on your overall borrowing capacity. You need to get more specific advice rather than trying to find a solution without people understanding the full story. Myself and several other brokers have given you some good information already. Pick up the phone and give one of us a call.
     
  17. Clairal

    Clairal Member

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    Hello everyone, any ideas about splitting the current loan? Say if I need 150k to settle the investment property, so I split my current loan into two, one is 150k the other is the balance. Then transferring from offset to that loan and redraw to use it. I heard this from someone, wondering how feasible it is and risks? Thanks
     
  18. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    There's no point doing that if the current loan is an IP loan. If it's a PPOR it would be worth while but will depend on lender - some loans well close automatically when paid out.
     
  19. cheekykoon

    cheekykoon Well-Known Member

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    Go ANZ. Westpac is good as well. Both matched for my case but since ANZ policy does not do less than 50msq int size, there is nothing i can do but to go NAB.
     
  20. Clairal

    Clairal Member

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    Thanks everyone, does anyone have recommendations on accountants who's familiar with IP?