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Low Valuation Shortfall Home Loan

It’s not uncommon for a bank to place a low valuation on a new construction when arranging a building loan. If you are worried about a low valuation or have received a low valuation, remember that it is only an opinion form an individual valuer and that there is help available.

How Can Building Loans Australia Help With A Low Valuation?

There are a number of things that Building Loans Australia can do to get you a better result:

  1. Get a second opinion.The first thing we can do is get a second opinion from another valuer. We can order a valuation upfront without a formal mortgage application to the bank, saving you time and effort in making an application. This also helps to protect your credit file by keeping bank applications to a minimum.Essentially here we are shopping for the best valuation which will then determine which lender to go with.
  2. Increase the LVR: The second thing we can do is look at alternate lenders that will lend based on the low valuation. For construction, some lenders will only lend to 80% LVR (loan to value ratio) whilst others will go to 95%. It may be that with the low valuation, an 80% loan would not be sufficient but increasing the LVR may get you across the line.
  3. Remove Rebates: If there are any rebates or builders’ cash backs, we can negotiate to these removed. These are a marketing ploy by the developers and marketers to artificially inflate the prices of their stock. When it comes to getting a valuation done, the valuer takes these into account and works out the real price you are paying. (For example, a purchase price of $400,000 with a rebate on settlement of $20,000 will result in a valuation of no more than $380,000 as this is what you are really paying for the property.)
  4. Provide evidence to the valuer: It is possible to dispute a valuation with the valuer and evidence of recent sales to support the purchase price. This is great in theory, though in practice a valuer is going to be very reluctant to change their opinion.

Should I Contact Building Loans Australia?

With access to hundreds of products from more than 35 lenders, Building Loans Australia will be able to search the market for the best solution to your financing problems. If it’s doable, it’s doable through us. Contact us today for more information.

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Once again, many thanks.”

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