Choosing the Right Lender to Get the Right Valuation: How The Valuer Determines If Your Loan Is Approved (And What We Can Do About It)

Most times Mortgage World Australia puts a loan application in for a client, the lender will carry out some sort of valuation on the property. When a client is refinancing to get cash out or an equity release a favourable valuation may help avoid Lenders Mortgage Insurance (or LMI) and may result in maximising the amount of equity that can be accessed. 

Not all valuations are created equal, not all lenders use the same type of valuations. There are actually four different types of valuation.

A.V.M. – (Automatic Valuation Model) A computer uses an algorithm to estimate the value of the property. It is based on factors such as historical sales prices of similar properties in the area and capital growth statistics. You get these within minutes of asking.

Desktop – A valuer does a valuation without going to look at the property. The valuer reviews recent sales in the area to determine the value.

Kerbside/drive-by – In this case, the property you want to be valued gets visited by a valuer (but they don’t enter the property) they assume the inside reflects the outside of the property or use other sources such as photos. This information combined with the information they’d gather doing a desktop valuation is used to value the property.

Full Valuation – These come in short form and long form. They require a valuer to enter the property to look at each room plus the steps in a kerbside/drive-by valuation. This can take a bit more time – 1 week or more if the property is tenanted and is difficult to access. These should be the most accurate – but don’t always result in the highest valuation amount. Short form valuations are the most common form of valuation and long forms are primarily used on complex, unique and high-value properties.

Using the Right Lender Helps You Get The Valuation You Need.

As I said earlier, not all lenders use the same types of valuations on their home loans. For example, a lender that uses automated valuations will be faster to get approval from. Knowing which valuation types are more likely to get you a higher valuation and which lender uses them means that you have an advantage working with us on your home loan compared to going directly to the banks. It is not uncommon for a valuation at one lender to be significantly higher than the valuation at another lender. This could mean the difference between you raising enough equity to pay that next investment property or not.

For help with determining the value of your property and potentially maximising the equity you can take out please call 1300 661 211 or enquire online at https://www.mortgageworldaustralia.com.au/contact-us/