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Quick Mortgage Advice

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  • Quick Mortgage Advice

    Hi there,

    I have a quick question:

    Let's say the bank gives me an 80% mortgage. Are the 80% based on the purchase price or a registered valuation?
    I'm wondering whether I might be able to get more than 80% if I buy below valuation price.


  • #2
    I believe some banks now go on whichever is the lowest but you used to be able to get a valuation of more than the purchase price and borrow 80% of that.


    • #3
      Purchase price. They will lend against valuation "usually" if the Sale and purchase agreement is more than 12 months old.


      • #4
        Purchase price - they always reserve the right to get a valuation, and if so, and that is less, they still may reduce lending in some cases. If valuation is higher, they will always us purchase price.
        One thing that has come up very recently, is the requirement for some lenders to have 3 comparable sales in the last 6 months - not always possible in this market, depending on location.


        • #5
          Depending on the type of property, location and the contract it will be purchase price or valuation whichever is the lower.


          • #6
            The trick as I see it....

            Which is too late for me BTW

            Is to just buy it normally strumping up 20%, but just putting the mortgage on floating

            Then getting your RV done and take it to another bank


            • #7
              fynn: Buy nothing. Wait 12 months.

              Do not get sucked by the current "dead cat bounce", which is a direct result of 6.5% 30 year first mortgage loans - but which are only fixed for 3-4 years maximum.

              If a depression is avoided, then rates MUST return to about where they were a year ago: 8% on deposits, and 11% for a first mortgage. Under those numbers, every sane person would rent, rather than buy.

              If so, the price to buy must fall, to, at the very least, about 10% above the rental price. (The 10% premium is the price you pay to spout cr*p with other similarly-minded idiots at BBQs and PTA evenings.)


              • #8
                What if a depression is avoided but we remain in recession for another 24 months green fish.
                You would have missed out on 2 years worth of owning property that is currently cashflow positive.
                What if we do end up in a depression? rates will remain low.
                What if Obama is assasinated....
                What if some crazy korean sends a nuke to Oz
                What if......

                Someone said here on PT back in March when the sharemarket was at it's lowest not to invest in it because it was about to drop another 30%..... geee I guess that was a little off the mark.

                Do what is right for you today blue kiwi.

                The same way you can't foresee if the market is going to go up you can't see if it is going to go down.

                Make your decision with the information you have at hand today and then be happy that you took decisive action whether that is to buy or not buy.