I’m completing on IP three this month and the lender’s valuation came back at $155,000 which was my original accepted offer on the property.
I have since had a building inspection done and the builder found a few things wrong which I used to negotiate the new price down to $150,000. Does this mean if I am paying a 20% deposit I can pay 20% on the $150,000 purchase price and then get the extra $5000 back from the lender on settlement if I keep the loan based on a purchase of $155,000? Will most lenders let you do this? I could then use the $5000 on subsequent deposits etc. Hope this makes sense ! Thanks Jon
Purchase price or valuation whichever is the lower is the rule of thumb.
Just make sure you advise your lender now as otherwise you might get to settlement and the transfer document will show the lower and the Bank will not settle.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thanks for the replies!
I advised my lender and they said officially they would need to restart the whole loan application process and the only way around this is to get the vendor to give me a cheque for $5000 on settlement. As settlement is in two weeks we are hoping to get the cheque from the seller but I guess it would be hard to ensure this happens. I am trying to get my solicitor to get them to sign something saying they will give me the cheque, but my solicitor has said “there is no guarantee they will accept”. Not sure why my solicitor is acting like its a big issue (the seller already agreed to the lower price), but waiting to hear the latest after the long weekend! Fingers crossed…
Cheers
Which lender is this? If you have to go back to assessment, quite a few lenders will be able to run this through the processes relatively quickly, unless you’re with one of the snailbased banks. :)
The loan provider is http://www.loans.com.au. They said they would have to reorder the valuation which takes a few days to get. They move slow but had a 4.48% pa rate which is the best ever in Australia I believe which was the motivation to go with them. Will touch base with them tomorrow and ask if it would b achievable in the time left. Thanks
Hi there, thanks again for the replies. The IP settled on time. In the end was arranged for the seller to give us back $5000 in the settlement adjustments so a reapplication may not always be necessary when you negotiate a lower price after signing contracts.
Cheers