Refinance

Lanisur75 on 28/03/2014 - 23:33

Hi Ozbargainers,

I need some advice on home loan refinance. My mortgage is currently with Ubank and I recently approach them to refinance my home loan to pay off my credit card. They asked my how much the property value is. I told that based on January Sales from apartment block, it would be valued about 400K+. The bank organise the free valuation and the valuer valued about 375K which is below of my expectation. The last Saturday, my next door unit, which is smaller than mine one (-15 sqm) was sold at 400K. I contacted the valuer to get some further clarification and he seems to be careless to provide me with some clarification.

Now my question is that if I accept this valuation, should it be a problem in future?

Financial

Comments

  • ilostnemo on 29/03/2014 - 00:04
    +2

    Don't refinance to pay off your credit card.

    You'll be paying your credit card for the next 25 to 30 years.

    Look at doing a balance transfer, interest free.

    Bank valuers are always cautious, they look at what your house would fetch in a fire sale, not top dollar, they are only interested in what they will get for it with no effort.

    • cloudy on 29/03/2014 - 09:32
      +1

      Don't use ur home as a credit card, it's a slippery slope as ilovenemo said.

      • CyberMurning on 29/03/2014 - 15:27

        its i lost nemo not love nemo haha

  • ShannonIngram on 29/03/2014 - 20:21

    Valuations aren't set in stone. Valuers are very reluctant to change them as it means they made a mistake, but it does happen. I have had quite a few valuations reviewed for my clients. Also I was just having a look at the ubank site. They used to be very hard to beat as they were so no frills but it seems rates have crept up over time and I've got a few options cheaper than them now (except for that one year fixed rate - they've still got me there!) but for variable and longer term fixed there might be some other options for you.

    Before you go looking at refinancing though and incurring costs that way, I'd contact ubank and have them formally challenge the valuation with the valuation company. You shouldn't have to contact the valuer directly (although I don't know how ubank runs things). Provide them with evidence of settled sales that have gone through recently that are comparable to your property and they can get the valuer to have another look at it.

    In contrast to what ilostnemo said above, I think a debt consolidation loan is not necessarily a bad thing in all circumstances. I've done plenty of loans for people that have gone the balance transfer route and then maxed the new card out as well, and for them it's better to consolidate it into one loan and close the cards off. It really depends on the individual person and how your willpower is - balance transfer is certainly a cheaper option but it is easy to get yourself in trouble with access to two credit cards.

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