The first step that is taken by bank of financial institution when a home loan application is received is to have the property valued. This is usually not done by the bank staff themselves. They either have a panel of valuers in their fold or they outsource the activity to some good valuation company Melbourne. What are the reasons for having the properties valued before deciding on the loan amount. Let us try to find some answers for the same.
First and foremost, the loan amount would basically depend on the market value of the property. Though there are some informal ways and means by which the value can be found out, when it comes to lending thousands of dollars of home loan to customers, there ought to be an authenticated and legally accepted source which will be able to give a report on the valuation of the property.
Towards this objective seeking the services of agood and professional property valuer is very important for banks. Only on receipt of the valuation reports are matters taken forward. However, valuing such properties that come up for bank loans is not easy not because of the complexities. It is simply because of the numbers that could be landing on a valuers table. Hence, if you wish to be a successful property valuer for banks you should understand the need to handle to big volumes having very tight and highly demanding time lines.
Whenever a decision to buy a home or some other property is taken, the first thing that comes to our mind is the need to source funds for such purchase. There is no doubt that banks and financial institutions are the major source of funding for most of the customers. However, when applying for a home mortgage loans there are a number of steps that need to be gone through. One such step is getting the property valued by an independent property valuer. Let us try and find out why valuation is very important for mortgage home loans and how exactly it is done.
The main reason why valuation of property in Brisbane is very important for banks and financial institutions is quite obvious and not very difficult to understand. Banks lend money to borrowers for constructing or buying homes and apartments. Once the loan is disbursed, the original documents of the property stands pledged with the banks and therefore the property in question also remains mortgaged to the bank as security. While all this is fine, it is not always possible for the bank to lend money based on the valuation show in the property sale deed alone.
It is here that the role of an independent third party valuer become very important. They help in ensuring that the valuation shown in the sale deed is not way off from the actual market value that the property commands at a particular point in time. This is very important because when taking a lending decision, the banks totally depend on the sale deed price and the valuation report that is generated by an independent third party valuer.
Hence, it is not surprising to see that a major chunk of business for real estate valuers comes only from banks and financial institutions. This goes to prove that property valuation and mortgage home loans are closely interconnected.
It is quite obvious that only 2 out of 10 people would be in a position to buy homes from their own funds without taking recourse to loans. While the dream for owning a own home or apartment is quite overpowering, lack of finance often comes in the way. In such circumstances the only option is to go in for home loans or property loans as they are also referred. Today, almost all banks and financial institutions have become extremely aggressive in lending loans for construction of homes, purchase of new homes or for buying strata-buildings and apartments. Many of the customers often do not do their homework properly when it comes to borrowing home loans. It would not be right on part of the customer just to go in for the first home loan that comes their way. It is important to take such vital decisions after a lot of due diligence. It has to be kept in mind that mortgage home loans are very long in nature and hence they must seek help of the right property valuers in perth to be able to get perfect idea about value of the house.
The first step before going in for any type of home loan is to find out how much you can contribute as your share for such loans. No banks or financial institutions would be willing to fund 100% of the cost of the entire property but for some very rare and extremely special circumstances. Hence, as a borrower you should be ready with your margin money and usually this is around 15% of the cost of the property. The next important thing is to find out how good your credit history or credit score is. This has a major bearing on the quantum of loan, tenor of loan and most importantly the interest rates that will be charged for such loans. Hence, it is always advisable to keep your credit history clean and blemish-free to the maximum extent possible.
You should be willing to move around and do some window shopping and take inputs from as much banks and financial institutions as possible before actually zeroing in on one particular bank or financial institution. You should be all eyes and ears to be on the lookout for some hidden costs in terms of processing fees and other such charges. You should also be well informed to make a choice between fixed rate home loans and floating rate home loans. If the tenor is short then it is better to go for variable rate loans because you will be able to come out of the loan liability that much faster though you may end up paying something more by way of interest.
Since home loans are a long term liability and you also have some tax benefits available against such loans, these figures must also be factored before signing on the dotted line. You should be left with enough funds to run your family. You might be an individual when you might have taken the loan but since many mortgage loans could run for more than 15 to 20 years, you must keep your long term expenses and requirement of funds before committing yourself for such long term liabilities.
There are many banks which also offer the facility of paying back your loan in installments and you should always keep this option in mind. However, you should again do a careful calculation and find out whether it makes sense to reduce your mortgage loan liability or invest the money elsewhere and earn some profit out of it. In fine, while getting a home loan is not a big problem, proper planning and forecasting is of extreme importance.
When it comes to real estate buying there is no doubt that a majority of the purchases are made with the help of bank help or through mortgage home loans. This is because buying a home involves spending thousands or even millions of dollars in some cases. Secondly, a vast majority of purchasers will not have their own funds to invest so heavily in the real estate. Even if they had the kind of money, they would like to go in for mortgage loans because of the tax benefits and other attractions associated with it. However when applying for mortgage home loans there are a number of important factors that are taken into account. The valuation report submitted by certified and experienced valuers is something that cannot be ignored under any circumstances. This is one of the most important due diligence processes that are gone through by banks and financial institutions before a loan is disbursed. Let us over the next few lines try and find out how the valuers’ report could impact the final loan amount, tenor of loan, repayment terms and other such important factors.
Whenever a customer applies for a mortgage loan, the first and foremost task of banks and financial institutions is to raise a property valuation request. These requests are mostly handled by the banks’ approved list of valuers. The valuers immediately get into the act and start the process of valuation of the property in question. They value the property taking into many inputs. This could range from the size of the property, its location, the age of the property, the type of soil on which the property is located just to name a few. Based on these factors and after using various methods of valuation, the valuers come up with a valuation for the property.
This valuation figure is confidently sent to the bank. The bank use the valuation and also take into account other factors such as the income of the borrower, his age, his job security and stability, his past credit and repayment record and then decide on the loan amount. While the other parameters are also equally important, there is little doubt that property valuation has as silent but important role to play. Hence, when a person is planning to buy a real estate property, he should keep this point in mind and ensure that the valuation is in his favor.
While there is no doubt that buying a home is indeed one of the most important and momentous occasion for many customers, arranging finances for the same is often a big headache. Towards this objective it would be pertinent to point out that banks and financial institutions have a very important role to play. Whenever a customer raises a request for home loans, the first thing that banks do is to find out the value of the property. This is very important because the valuation of the property as reported by the property appraiser or valuer has a big bearing on the amount of loan that the customer becomes eligible. While there is no doubt that other factors like income, stability of job or business, past credit history and other factors do have a big role to play, property valuation is the first parameter that the banks take into account while deciding on the credit proposal of a customer.
The valuation companies and individuals take a number of factors into account while going in for valuation of such properties. The age of the property, its location, the size of the same, its present condition, the quality of materials used for construction are some important factors that are taken into account. There are also other factors that have a bearing on the valuation report that is submitted by the valuer. This includes the quality of amenities and facilities available in the locality or neighborhood, the condition of infrastructure that the locality has, the quality of people who reside in the area and quite a few other factors. These are often referred to as qualitative aspects of property valuation which also has an important bearing on the final fair market value of the property as reported by the valuer.
Hence as a customer you should be quite careful about the location in which you choose to buy a property. While the overall budgets are very important, it is always better to go in for a slightly smaller property in a reputed area than settling fro big properties in some lesser known areas and localities. This is because valuation will differ quite significantly based on the location of such properties.
Whenever a home mortgage loan application is received by banks, it goes through a number of processes, checks, counter checks, evaluations and appraisals. Valuing the property that is being planned for purchase is one such step. It is very important both for the lenders and the prospective borrowers. The quantum of loan, the tenor of loan, the interest cost and other such important factors are often determined to a large extent on the value of the property amongst other parameters. It is therefore important for the customers to ensure that they pay heed to this factor and ensure that the property in question shows a reasonably high fair market value when it is appraised by valuers.
There are a number of factors that could play a big role in determining the value of the property apart from the ones that have been mention above. For example, in many valuation reports apart from the fair market value of the property there are quite a few other pieces and bits of information which are also extremely useful for the customers and also the lenders. Simple information like the level of infrastructure development, the availability of the various amenities and facilities in the locality have a lot to in enhancing or decreasing the value of the property in question. Additionally, many valuers also take the trouble of defining the quality of people who make up the neighborhood. Also, some valuers make it a point to value other similar properties so that there is a logical comparison of the various market values.
Taking the above points into account, the banks decides on the amount of funding, the interest at which it should be funded and also the tenor of the loan. However, other factors like income stability, age of the borrower, his or her previous credit history and records also have a bearing on the loan amount. It is therefore important for valuers to look at mortgage loan applications holistically. Mere focus of credit history, income stability and age may not be able to get the best deal as far as the home loans are concerned. It would also not be a bad idea for the customers to conduct their own valuation and corroborate the valuation figures as reported by the banks and financial institutions.
Whenever we decide to buy our own dream home, it is quite likely that eight out of ten times we will approach banks or financial institutions for loans. It is very difficult for most of us to raise the kind of resources from internal sources for buying a home. Many of these homes could cost thousands or even millions of dollars and certainly we will have to fall back on mortgage loans as a source of funding.
While today banks and financial institutions are more than ready to fund for your new home purchases or even second home purchases, they would certainly like to be sure that they are funding the right amount, to the right person and most importantly for the right property. Towards this objective, they would like to be doubly sure that their funds will be safe and the money will come back to them over a period of years. Hence, they go through a number of due diligence processes including valuing the property that a mortgage loan applicant is planning to buy.
Whenever a customer files an application for home mortgage loan, the first thing that the banks do is to raise a request to their approved group of valuers for valuing the property that is mentioned in the customers’ application. Only when the valuation report is received do the banks take a call on the funding amount or whether the property is worth being funded at all. Hence there is no doubt that the valuation report has a very important role to play in increasing, decreasing or even stopping a loan from being funded. Therefore, when you are planning to buy a home through mortgage loans it is incumbent upon you to go through some due diligence processes on your own.
First and foremost, you must always look for properties that are having a good market value. There are a number of factors that could impact the value of the property. The location of the property, the promoters who are behind it, the age of the property, its size and overall condition are some important factors that could play a big role in deciding the overall valuation that a valuer will assign for a property. Hence, you have to be smart and intelligent from your side as a customer before applying for mortgage loans.
To understand how valuers could impact mortgage home loan amounts, it is necessary to understand valuation in the first place. The main purpose of valuation report is to ensure that both the buyers and sellers have the right information about the fair market value of the property that is being bought or sold. Apart from this main purpose, good valuation reports also contain very useful information pertaining to the quality of the construction, details about the locality where the property is situated and other such valuation information. These are subjective in nature but help the stakeholders to take a correct decision.
Now coming back to the subject of connection between home mortgage loan amount and valuers report, it will be an understatement to say that they have a big connection. Whenever a customer applies for a home loan the first task of the bank is to run the application through a valuation process. Only when the valuation report is received does the bank take a call on deciding on funding or not funding of the property. Hence, it is quite obvious that the valuation report plays a big role in helping or hindering the customer from getting the right amount of mortgage loan. The higher the property value the higher will be the loan amount. Hence, the onus lies on the customer to also have his or her own valuer. This will help the customer to have another report to counter the valuation report shown the bank.
Further, a good valuation report apart from helping customers to gets the right amount of home mortgage loan, will also help him to get useful information about the property tax amount payable, the stamp duty payable on agreements just to name a few. In fine, the role of valuer is very useful both for the customers and the financial institutions.
To begin with whenever one is planning to go in for home loans, it is important to have a fix on the budget that they have in mind. Secondly, they should have shortlisted at least a few homes around the same budget and only then would they be able to move forward in the matter. Further, it is also important to have a look at the locality, size of the proposed real estate and other such important factors. These are vital because they will certainly have a bearing on the overall cost of the property.
Once these basics are firmly in place, identifying the right bank or financial institution is very important. This again could be a difficult task not because of dearth of bankers but because of too many of them. You could be literally flooded with home loan offer and choosing the one best from amongst the many could be quite challenging.
It is in this situation that one should be knowledgeable and informed. You have to look at various parameters such as interest rate, funding amount, repayment tenor, other charges if any and other such important pieces of information. Even a small change in interest rates of a few basis points could make a big difference to the final cost. Hence you should be ready to go down the last decimal in terms of interest cost. You should also understand the importance of hiring a good real estate valuer. His role is very important because the loan amount would depend on the valuation reports submitted by these professionals. The higher the valuation report the higher will be your loan amount. However, the valuation report should not be artificial but should be a true and fair reflection of the market value of the property in question. Hence, your home loan decision should be carefully considered and weighed.
There are a number of options that one could think of as far as career in real estate industry is concerned. In the technical side one could become a construction engineer and either take up a job or start his own business. On the other side of the spectrum, one could think of becoming either a real estate agent, real estate advocate or last but not the least even as a real estate appraiser or valuer.
There is a big demand for property appraiser or valuers and it would be closer to look at this as a career option. The main purpose for which buildings and apartments are built is to enable somebody to buy the same. In the same light, those who are real estate property owners often would like to sell their old homes or apartments and buy new ones. Hence, there is a regular and large amount of commercial activity that takes place around real estate industry. Whenever there is a need to either buy or sell a property, there is always the need to identify a valuer for the purpose of valuing the property in question.
Hence, there is no doubt that there is a continuous business opportunity for property appraisers and valuers provided they know how to make the best out of it. To begin with it is important to understand the reason for such valuations in the first place. The main purpose of valuing a property is to ensure that there is true representation of the fair market value of the property that is either being sold or bought. Hence, customers have no other go but to approach a valuer to get a report confirming the fair market value. This is the main purpose for which a valuer is required. However, not everyone can become a valuer and it calls for having the right qualification, certificate, experience and expertise to move forward.
To start off, it is important to have a firm idea about the amount of loan that you would require for your home. You need to understand that banks do not the entire amount that is required for buying a home. Around 25% of the funds have to be arranged by the borrowers. So, this important aspect has to be borne in mind before going in for such home loan borrowings.
Further as a borrower you should not hesitate in shopping around for the best deal as far as your home loan is concerned. Today there are literally dozens of banks and lenders and hence it is incumbent on you as a borrower to identify the best lender after taking into account various parameters. You have to keep in mind the interest rates, the overall tenor of the loan, the processing fees and other hidden charges that might be applicable.
You must also employ the services of a good property valuer or a real estate appraiser before applying for such loans. This is extremely important for you to have a reasonably good idea about the fair market value of the property. Though banks on their own have the properties valued before deciding on the credit proposal it is important for you to also have a valuation report which in all probability will be the same as reported by the banks valuers.
Apart from the extremely important role played by property valuers, you should also be ready to take the services of a real estate lawyer or advocate. They also have a significant role to play as far as ensuring the legal authenticity of the property in question. Hence, before applying for a home loan there are quite a few important steps that need to be followed. Last but not the least, having a good credit record is also very important to enable you to get the best deal in terms of funding, interest, repayment tenor and waiver of processing fees.
One of the biggest factors that have a bearing in the quantum of your home loan, is your current age, income, other liabilities and last but not the least your credit history. Additionally, the cost of the home or apartment, the margin money that you are ready to pool is also important considerations which could affect your home loan.
Apart from the above, there is one more important component which many of us often tend to overlook. It the value of the property as authenticated and certified by a competent real estate valuer. Though each and every property will have a market value and also a value that is mentioned in the sale agreement, taking a buying decision on this information alone is not sufficient. The values need to be verified and certified by an independent valuer having rich experience and expertise in this area of operation.
Hence, if you are planning to buy a home, you should understand the importance of taking the help and services of a property valuer. Apart from giving an honest and transparent report on the fair market value of the property, the valuation report will also contain a number of other subjective information which is very useful to the borrower.
Even banks and financial institutions place a lot of importance to the valuation report of a professional valuer. The loan amount sanctioned, the interest cost applicable to it, the tenor of the loan all have a bearing on the quality of valuation report that is submitted by real estate and other property appraisers in sydeny. Hence, there is no doubt that if you are looking for your dream house and are dependent on banks and financial institutions for funding of the same, you must keep the importance of valuers in mind.
Many property valuers are not only good at real estate valuation, but they perform other valuation involving movable and immovable assets such as machinery, stocks and share, commodities, etc.
Given the above market and competition scenario, it is only natural for real estate valuers to find out new ways and means by which they can increase their business. Though the scenario looks quite tough, it is not completely insurmountable to say the least. All that it requires is to find out ways and means by which the risk can be spread far and wide. The biggest problem for most of the property valuers is that they are dependent on just vanilla property valuation to run their business. While this type of valuation might still be giving the major chunk of business, it is becoming very crowded here. Hence, good and intelligent property valuers are those who can look at other ways and means by which they can increase their revenues. There are quite a few such ways and let us have a look at them over the next few lines.
There is a big market for compensation, backdated and retrospective valuations which should never be overlooked or underestimated by real estate appraisers and valuers. Since these are quite complicated valuations, the fee payable is much higher and therefore it offers a great chance to increase revenues without having to look very hard outside. This apart, it is also vital for property valuers to look beyond real estate valuation alone.
Today, banks and financial institutions offer opportunities for different types of valuations. For example, home mortgage loans are a big chunk of business for banks. However, before disbursing such loans they will have to take important inputs from real estate valuers and this could be a continuous opportunity for business. In the same way, apart from real estate, banks also require valuation of plant and machineries and other movable and immovable assets belonging to their customers. This is without doubt a great opportunity which must not lost sight of.
To conclude, there is also a need for property valuers to look at the various methods of property valuation and to give a report based on the method which is beneficial to the customer.