Hi all,

I have been scouting around for house and we (myself and gf) have finally found our dream home.

However, the price of the property is a bit on the high side (relatively). My first question would be, what factors do the valuators usually consider when valuating the price of a property? (i.e. location, renovations, furniture?)

The price of the unit is RM250k but if I'm not mistaken the market value is around RM200k. It is fully renovated and fully furnished (with everything from beds to tv's to sofas). I'm wondering if the valuator sent by the bank will take into account all these factors?

Also, in reference to this other topic Link, I see that it is possible to get 5% or 0% downpayment on a property based on the loan amount obtained. Currently in my reserves I only have 15k on hand, hence I am hoping to pay 5% downpayment.

As for the monthly repayment, I have no problems servicing it as I have calculated it to be below 30% of my income.

What are my chances of getting a 95% - 100% loan on this property? Any advice will be greatly appreciated!

1. in your understanding.. what's the definition of a market value?

a casual buyer don't usually engage a evaluators. not unless the stakes are high and you have reasons to protect yourself. (mostly the seller/bank would engage an evaluator).

a 15k reserves on a +200k property.. i'd strengthened my reserves a little more if i were you (a way more actually). this is a pragmatic approach given the current economic circumstance we're in today.

that +200k loan will carry a cash burn rate of a little over 1k/mth. can you imagine how stable is your reserve if you factor in the possibility of loosing a job and how long can that reserve last (after deducting that 5% for initial downpayment)

for repayment, it may well be below 30% of your current income. but ask yourself this honest question.. how much savings do you get to keep monthly after deducting all your monthly expenses?

(you may be able to trick the bank, but you may precariously put yourself into a risky situation should you not able to manage a good cashflow).

p/s - banks' underwriting is not as loose as before.. it's not easy going to get approval for that 95%. all the best to you.

This post has been edited by lwb: Mar 18 2009, 04:36 PM

1. With regards to valuation - valuers won't give 2 hoots on the furniture and fittings. In terms of the renovation - it depends how extensive the renovation has been. If it's a condo, valuers tend to be more conservative in attaching a premium to the renovation. For a landed prop - it's easier. e.g. Kitchen extension is more visible.

Valuers tend to be stick on prudence, especially in these hard times. They will look at recent transacted prices as a benchmark. I would suggest u "make friends" with valuers like TD Aziz or VPC asap. Ask them to give u a verbal indication of the property value. You can take that as a fairly good estimate. The last thing you need right now is for your valuation to fall short and you have to top up more cash.

2. As to affordability. You may be able to afford the installment and downpayment. But 15K as your overall reserves may be stretching yourself way too thin. I won't patronize you or lecture you. You know your own financial standing best.

This post has been edited by Phoeni_142: Mar 18 2009, 11:11 PM