Valuation Timing

Hi all,

I'm about a week or so away from finishing a small renovation. Ideally I'd like to use any equity I've gained from the renovation to purchase another property, but I'm still unsure when this would be. Given that the property is/will be looking in as good condition as ever (not currently tenanted), would it be smart to request a valuation now, or do it down the track when I'm actively looking to purchase another property?

My current LVR is approx 90%. Hypothetically if after valuation it was 70% LVR, could I use that equity for a deposit (including LMI + duty) at 90% LVR, or would the lender normally cap this at 80%?

My loan is through Bankwest if that matters. As I've said I'm not immediately looking to purchase again, just wanting to get a feel for how this all works.

Thanks

 

You'll struggle to get cash out to 90% for an investment property these days, but stranger things have happened. If servicing is strong and you do a pre-approval for the purchase at the same time, you'll likely have more chance. You'll need a strong income too - the BW calc is pretty tight for investors these days.

 

Give it a go now and see what the result is. Try a couple of lenders. You might find other valuations mean you could keep the lending to 80%.

 

Best move will be to get the property valued immediately after reno is complete and get the equity released/left in offset account until next investment property is found..

And yes, equity can be used to fund next investment purchase (provided income can service the loan).

And 90% lend should not be a problem either (provided income can service it). I just did re-finance for a client at 90% LVR investment loan P&I ..

Stamp duty can be paid out of the released equity too and LMI gets capitalised on top of new investment loan..

I'll strongly suggest to get the equity released and leave it in offset account so no extra interest gets charged until it's used for next purchase..

All the best!!!

Cheers,

 

It might be possible to release equity at sub 80% LVR - higher than that will be difficult if there’s no clear/immediate evidence of what the funds will be spent on.

Cheers

Jamie

 

Would it not have to be the same lender? If not, how would that work with having two separate lenders having the same security for the loan? Or maybe I've misunderstood

 

Is there a timeframe or something for the valuation? Or is it once the equity is released you can do what you please?

 

It would mean refinancing to the lender with the better val. The investment purchase could be with either lender or a new one entirely.