Hi all,
I'm wanting to bid at a auction in Perth in a bit over a week.
I know they want a 10% deposit but the problem is getting a full valuation from a Bank.
Banks want to do a full valuation on a house before they will do a full approval.
Problem is auctions don't have a subject to financial approval.
I know you can win the auction, pay the 10% but if you don't get full approval from a bank your stuffed and loose your 10%.
Without enough equity or cash whats are other ways of buying at auction and reducing the risk of loosing your 10% deposit.
I know you also have to do a building/pest inspection before auction as well.
Any other advise will be helpful.
Happens every day of the week.
In many cases we get a pre-approval done for the client and at the same time order a valuation with an assumed purchase price by an acceptable valuer.
The client then knows that as long as the property doesnt go for any more than that figure and the relevant risk ratings etc are all good he should be good to go.
Course if LMI is involved gets a little harder but not to say it is not achieveable.
Your Mortgage Broker should be able to guide you accordingly.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thanks for the reply Richard,
I know how much the property will be valued for as it is an identical layout to my current house on the next street.
The land is 30sqm smaller and the condition of the property is a bit worse when i purchased mine but mines since been renovated.
I lived in the suburb for 25 years, problem is other people who bid at auction might bit higher then what it would be valued at.I've got pre approval by my current lender about 30K above what the price will go for but I'm scared a bit incase for some reason the full approval gets rejected.
Also do lots of people use deposit power instead of cash or cheque? I have about 45K cash in offset (way above 10%) and just over $60K in equity in my current investment.
As Richard mentioned- your broker can organize a valuation before hand if required…but of course you can’t do 3-4 valuation for all your auction; there is a limit + at times you will need to pay depending on the bank and how many times you can order the valuation already.
Another solution is to go for a lender that will provide an extra $10,000 cash on top of what ever loan amount your applying for; so if your valuation is short $!0,000 that would be enough to cover for the short fall; if your cash is very tight.
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
If anyone is interested, house was passed in with no bids, had a feeling they would. Only about 5 interested 'couples' showed up.
On a greater note they are taking offers with only subject to finance approval and the reserve is 50K below what i expected!
Hopefully my offer wins!
Yea it’s a slow market
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
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