What to do when your bank’s valuation is too low: a case study
Purchasing a home or block of land should be an exciting time in your life. A time full of joy, planning and visualising. Picturing where you’ll have your Sunday morning coffee while you read the paper, dinner parties with family and friends, and the placement of that heirloom piece of furniture.
Do you want to know what stops those dreams in their tracks faster than you can say ‘SOLD’?
When your chosen lender's valuation comes back too low, leaving you in a heck of a pickle.
Let’s set the scene
A former colleague from back in our days at one of the big banks contacted Lenny with a customer they just couldn’t help.
Donna and Laurence went to their current lender (one of the Big Four) for finance of their newly purchased block of land. They were shocked to discover that the lender's valuation came back a staggering $65k less than the contract price, putting them in a stressful and difficult position.
Their current lender couldn’t help them leaving Donna and Laurence with the prospect of a) putting together a larger cash deposit to reduce the Loan-to-value ratio (LVR) or b) having a significant amount added to their costs for Lenders Mortgage Insurance.
That old colleague? He thought Lenny might be able to do better, and sent Donna and Laurence our way.
Lenny has relationships with 41 lenders
Using our extensive knowledge and expertise, Lenny rounded up four alternative lenders who we thought might be able to help Donna and Laurence get that block of land minus the heartache and the eye-watering bill.
Three of those lenders returned valuations for the block below the contract price.
But the fourth?
Returned a valuation that aligned with the contract price! *champagne popping*
The end result?
Donna and Laurence were able to purchase that block of land without coughing up extra cash for their deposit, or paying for Lenders Mortgage Insurance. That stress they were initially feeling, evaporated and was replaced by excitement and possibilities for the home they’ll build.
Looking to purchase your own land? Lenny offers an obligation-free virtual cuppa to give you a no-fluff, no-sell chat on how we can help you secure finance for your land and building process.