If a lender values a property below the agreed purchase price, it may assess the loan against the lower figure. The difference generally needs to be covered by the buyer or addressed through a different lending structure.
What to understand first
A valuation is one part of lender assessment, not a guarantee of market value. The valuer considers the property, comparable sales and the purpose of the valuation. Different lenders may reach different conclusions.
What lenders may consider
Review the loan-to-value ratio, purchase costs and available contribution before committing to the transaction. A broker can help model the effect of a valuation shortfall, but cannot guarantee a revised valuation or approval.
Practical next steps
Gather the relevant documents and compare the complete position, including repayments, fees, timing and the purpose of the finance. Lender policy varies, and information should be confirmed for the application being considered.
Questions to work through
Before proceeding, clarify how the valuation affects the proposed loan, contribution and contract timing.
- Confirm the valuation basis and any lender review process available.
- Recalculate the deposit, stamp duty and other funds required to complete.
- Avoid relying on a second valuation or revised approval until it is formally accepted.
This article is general information only and is not personal financial, legal, accounting or tax advice. Credit is subject to lender criteria, eligibility and approval.
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