Valuation of very old house for refinancing

Discussion in 'Loans & Mortgage Brokers' started by New investor, 3rd Aug, 2018.

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  1. New investor

    New investor Member

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    Hi,

    I got a hurdle refinancing my house. It is a very old house built in the 1920s. We bought it in 2009 with 2 units (dual occupancy) and an attached 1 bed room granny flat. Now we want to refinance to other bank.

    The valuer came and said that perhaps our place has unauthorised modification due the 3 kitchens in three units.

    I asked council for existing plan but they do not have any due the age of the building.

    I am so confusing at the moment, what could we do to get it pass valuation.

    Thank you
     
    New investor, 3rd Aug, 2018
    #1
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    What LVR?
     
    Terry_w, 3rd Aug, 2018
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  3. New investor

    New investor Member

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    less than 20%
     
    New investor, 3rd Aug, 2018
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  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    perhaps at such a low LVR a kerbside valuation may be acceptable by some lenders.

    3 of one title with 3 kitchens in each could not normally pass as acceptable security by most lenders - for residential finance
     
    Terry_w, 3rd Aug, 2018
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  5. New investor

    New investor Member

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    It is three kitchen total, not 3x3
     
    New investor, 4th Aug, 2018
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    Terry_w likes this.
  6. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    At 20% LVR there should be ok - agree with Terry re desktop/kerbside valuation.

    Cheers

    Jamie
     
    Jamie Moore, 4th Aug, 2018
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  7. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    If the add ons are legal NAB Choicelend and CBA would do that at that LVR, and a few others, just need to convince their valuers, but an AVM deskie as suggested by the peops above would be the go

    ta

    rolf
     
    Rolf Latham, 4th Aug, 2018
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  8. New investor

    New investor Member

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    The problem is that even the council does not have the house plans anymore. How can I prove that it is legit?
     
    New investor, 4th Aug, 2018
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  9. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    why go the hard road if you MAY have simpler options ?

    ta

    rolf
     
    Rolf Latham, 4th Aug, 2018
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  10. New investor

    New investor Member

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    Dear Rolf, can you please give me your advice for the options I could do
     
    New investor, 4th Aug, 2018
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  11. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Id suggest to do what the other broking peops have suggested

    find a lender that will do the reval with just a computer val, or a kerbside at mosy

    At that LVR many lenders will consider, but I guess we dot know your personal circumstances or indeed the suburb of the house etc. Either or both of those may force a full valuation, but even there you can usually get around it with the lender.

    Perhaps wait until it actually becomes an issue with that bank you are applying with ? or stay with the existing lender, because the house hasnt changed since they took security ?

    ta
    rolf
     
    Rolf Latham, 4th Aug, 2018
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  12. New investor

    New investor Member

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    We bought it ten years ago. We did some renovation like new kitchens, painting.. but nothing to the layout of the house. Our credit is good, always pay on time.
    The house has 3 separated electric meters and 3 postal addresses. I can even insure them repeatedly. Just the council has no original plan for it.
    Can I ask the council for any document that show 3 unit was legit?
     
    New investor, 4th Aug, 2018
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  13. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    U can search the records at the council to have them see.

    many older splits like this are typically not currently legal per se, but may have an existing right use allowance.

    Tricky one, been here many times over the years with many many clients.

    do you need the rental income to service the loan ?

    ta

    rolf
     
    Rolf Latham, 4th Aug, 2018
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  14. New investor

    New investor Member

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    We can service the loan with our salary. I am requesting the council for any document they have.
     
    New investor, 5th Aug, 2018
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  15. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    AVM. Desktop or Kerbside should mostly work then.

    will probs need to move lenders if the existing one is stuck on the valuers view

    ta
    rolf
     
    Rolf Latham, 6th Aug, 2018
    #15
  16. Redom

    Redom Mortgage Broker Business Plus Member

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    Sounds like it may be defined as '3 units on one title' given the layout of the property. Plenty of lenders don't have an issue lending to this type of property. As a first step, try to get around the valuation issue by having a different 'type' of valuation as others have suggested. This avoids the need for specific council plans.

    In general though, that may be difficult to do once stating its 3 units on one title. If a simpler valuation model can't be done, try and order a couple full valuations from other suitable lenders and fingers crossed a different valuation firm solves the issue.

    Why are you looking to refinance? If its not necessary, may just be simpler staying put and trying to work with your existing lender to find a solution.
     
    Redom, 6th Aug, 2018
    #16