Property valuation tips to secure your NSW home loan

Property valuation plays a crucial role when applying for a home loan as an NSW Ambulance employee. Understanding how valuations work can help you make informed decisions about your Home Loan application and potentially secure more favourable lending terms.

What Is Property Valuation in Home Loans?

Property valuation is a professional assessment of a property's market value, conducted by qualified valuers. Banks and lenders across Australia require this assessment to determine how much they're willing to lend and calculate your loan to value ratio (LVR). The LVR directly impacts your borrowing capacity and whether you'll need to pay lenders mortgage insurance (LMI).

For NSW Ambulance employees, understanding property valuation helps you:
• Determine realistic loan amounts based on property worth
• Calculate potential LMI costs if your LVR exceeds 80%
• Access interest rate discounts available for lower LVR loans
• Plan your deposit requirements more effectively

How Property Valuations Affect Your Application Process

The valuation outcome significantly influences your Home Loan pre-approval and final loan approval. If the property valuer determines the value is lower than your purchase price, your loan amount may be reduced accordingly. This could affect your:

1. Borrowing capacity - You may need a larger deposit to maintain the same LVR
2. Interest rate - Higher LVR loans often attract higher rates
3. LMI requirements - Additional insurance costs may apply
4. Home equity position from day one

Factors That Impact Property Valuations

Several elements influence how valuers assess properties in the current property market:

Location and Accessibility
• Proximity to hospitals and ambulance stations
• Public transport links and major roads
• Local amenities like schools and shopping centres
• Neighbourhood characteristics and future development plans

Property Characteristics
• Building condition and maintenance requirements
• Land size and property type
• Number of bedrooms, bathrooms, and living areas
• Unique features or limitations

Market Conditions
• Recent sales of comparable properties
• Supply and demand in the local area
• Seasonal market variations
• Economic factors affecting property values

Preparing for Your Property Valuation

While you cannot directly influence the valuation outcome, you can ensure the process runs smoothly:

• Provide access to all areas of the property
• Highlight recent improvements or renovations
• Research recent sales of similar properties in the area
• Ensure the property is clean and well-presented
• Have relevant documentation ready, including building permits

Understanding Valuation vs Purchase Price

Sometimes property valuations come in below the agreed purchase price. This situation requires careful consideration of your options:

1. Negotiate with the seller to reduce the purchase price
2. Increase your deposit to maintain the desired loan amount
3. Accept a higher LVR and associated costs like LMI
4. Seek a second valuation if you believe the first was inaccurate

How Valuations Affect Interest Rates and Loan Features

Property valuations directly impact the Home Loan options available to you. Lower LVR loans typically offer:

• More attractive variable interest rate and fixed interest rate options
• Access to premium loan packages with additional features
• Offset account availability without additional fees
• Reduced ongoing costs and charges
• Priority consideration during the streamlined application process

When calculating home loan repayments, remember that both your home loan interest rate and loan amount depend on the final valuation. Whether you choose a fixed interest rate home loan or prefer variable home loan rates, the LVR will influence your Home Loan Rates.

Documentation Required During Valuation

Your mortgage broker will coordinate the valuation process, but you should be prepared with:

• Recent bank statements showing your deposit funds
• Evidence of your employment with NSW Ambulance
• Details of your current financial situation
• Information about any existing debts or commitments
• Documentation supporting your income stability

Remember that buying a home involves various costs beyond the property price, including stamp duty, legal fees, and potential LMI premiums. Your valuation outcome affects how these costs impact your overall budget.

Working with Specialist Mortgage Brokers

As an NSW Ambulance employee, working with brokers who understand your unique employment situation can be valuable. They can help you:

• Understand how different lenders assess property valuations
• Access Home Loan options from multiple lenders
• Prepare for potential valuation outcomes before you apply for a home loan
• Structure your application to optimise valuation-related benefits

The property valuation process is an essential step in securing your home loan. By understanding how valuations work and their impact on your lending options, you can make informed decisions throughout your property purchase journey.

Call one of our team or book an appointment at a time that works for you to discuss how property valuations might affect your specific Home Loan application.