All Topics / Finance / Valuation or Purchase Price??

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  • Profile photo of jhk2770jhk2770
    Member
    @jhk2770
    Join Date: 2008
    Post Count: 57
    December 17, 2009 - 9:38 pm

    Sorry for my ignorance!  If the valuation of a property comes in higher than the purchase price, which price will lenders offer loan by??

    Purchase Price: 309000
    Current Valuation: 338000

    80 LVR –
    PP –  247200
    Val – 270400

    We are wondering whether to apply for 80 Lodoc to avoid LMI and declare income instead of providing docs.

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    December 17, 2009 - 10:23 pm

    Hi jhk

    Couple of answers.

    Lender will take the purchase price or valuation whichever is the lower so in this case they will lend against the purchase price of $247,200.

    As far as Lodoc goes then some lenders will ask for BAS and Trading Statements where the LVR is over 60% but many wont. However where the LVR is 60% + most (there are the odd exception but they charge a risk fee instead) will mortgage insure the loan and you will more often than not be charged the premium.

    Richard Taylor | Australia's leading private lender

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