Bank mortgage valuation is low ????
#1
Bank mortgage valuation is low ????
Hi,
I paid 0.25% for a property on the weekend and today the bank valuation has come 35k lower than the agreed price. I don't have 35k to cover the short fall. So my mortgage broker is going to arrange another valuation from another bank to see if they value the property more.
Any advice/guidance from anyone who experienced this ???
I paid 0.25% for a property on the weekend and today the bank valuation has come 35k lower than the agreed price. I don't have 35k to cover the short fall. So my mortgage broker is going to arrange another valuation from another bank to see if they value the property more.
Any advice/guidance from anyone who experienced this ???
#2
Re: Bank mortgage valuation is low ????
Hi,
I paid 0.25% for a property on the weekend and today the bank valuation has come 35k lower than the agreed price. I don't have 35k to cover the short fall. So my mortgage broker is going to arrange another valuation from another bank to see if they value the property more.
Any advice/guidance from anyone who experienced this ???
I paid 0.25% for a property on the weekend and today the bank valuation has come 35k lower than the agreed price. I don't have 35k to cover the short fall. So my mortgage broker is going to arrange another valuation from another bank to see if they value the property more.
Any advice/guidance from anyone who experienced this ???
#3
Lost in BE Cyberspace
Joined: Dec 2010
Posts: 14,040
Re: Bank mortgage valuation is low ????
Hi,
I paid 0.25% for a property on the weekend and today the bank valuation has come 35k lower than the agreed price. I don't have 35k to cover the short fall. So my mortgage broker is going to arrange another valuation from another bank to see if they value the property more.
Any advice/guidance from anyone who experienced this ???
I paid 0.25% for a property on the weekend and today the bank valuation has come 35k lower than the agreed price. I don't have 35k to cover the short fall. So my mortgage broker is going to arrange another valuation from another bank to see if they value the property more.
Any advice/guidance from anyone who experienced this ???
Have you checked out recent comparable sales in the area? Did you over pay?
I am hearing this happening quite a bit, especially with the Sydney property frenzy. People get desperate and pay too much. Not sure what you can really do about it except present comparable cases to the bank. I'm sure they have already done their checks though.
#4
Re: Bank mortgage valuation is low ????
Yes. It's 0.25% deposit. The price i agreed is a reasonable price comparing past sales.
#5
Lost in BE Cyberspace
Joined: Dec 2010
Posts: 14,040
Re: Bank mortgage valuation is low ????
Yep. Stick with what your mortgage broker advises.
#6
Re: Bank mortgage valuation is low ????
Hi,
I paid 0.25% for a property on the weekend and today the bank valuation has come 35k lower than the agreed price. I don't have 35k to cover the short fall. So my mortgage broker is going to arrange another valuation from another bank to see if they value the property more.
Any advice/guidance from anyone who experienced this ???
I paid 0.25% for a property on the weekend and today the bank valuation has come 35k lower than the agreed price. I don't have 35k to cover the short fall. So my mortgage broker is going to arrange another valuation from another bank to see if they value the property more.
Any advice/guidance from anyone who experienced this ???
I agree that you should follow the advice of your mortgage broker. He/she will do everything they can to secure a mortgage for you.
Bank valuations for mortgages are notoriously conservative. They want to be able to recover all their money quickly in the event of foreclosure and they take possibilities such as downward movement of the property market into consideration. The loan to value ratio is important too, if you're borrowing 95% of the purchase price that's going to be a higher risk to the bank than if you were borrowing 70%.
Whether or not you purchased at auction is important. If you purchased in the 'normal' way (I think it's called private treaty) then you get a cooling off period. There is no such period with auction purchases, so if you withdrew you would lose your deposit plus probably be charged fees and ongoing selling costs.
Best of luck, I hope it gets sorted out for you.
#7
Re: Bank mortgage valuation is low ????
In short, not a time to buy.
#8
Lost in BE Cyberspace
Joined: Dec 2010
Posts: 14,040
Re: Bank mortgage valuation is low ????
The banks are factoring in that they expect prices to fall, at some point, eventually. They don't want to get stuck with a negative equity situation, so they value in light of where they think the market might get to. They have been doing that for at least 6 months now, in addition to looking poorly on overseas investor sales. Many people have thought they could get a mortgage, only to find the banks and other finance sources wouldn't play ball.
In short, not a time to buy.
In short, not a time to buy.
I wonder if this is an apartment or house and if an apartment, it is in one of those areas tipped to have an over supply.
I doubt the bank would see risk in a house in Sydney unless of course the agreed price was $200-$300 above comparable.
#9
Re: Bank mortgage valuation is low ????
The banks are factoring in that they expect prices to fall, at some point, eventually. They don't want to get stuck with a negative equity situation, so they value in light of where they think the market might get to. They have been doing that for at least 6 months now, in addition to looking poorly on overseas investor sales. Many people have thought they could get a mortgage, only to find the banks and other finance sources wouldn't play ball.
In short, not a time to buy.
In short, not a time to buy.
It's been happening for a lot longer than 6 months - friends ended up in this situation well over 18 months ago an had to take a personal loan to cover the shortfall, else end up losing the balance of the deposit they paid at auction.
S
#15
Re: Bank mortgage valuation is low ????
I wouldn't be putting my money down on the promise of a mortgage at the moment.