Homeowners often only seek out a property valuation within the months or even weeks of selling their house. However, there can also be a number of reasons why it could be a wise move to get one done earlier, or even randomly for your own peace of mind.
This doesn’t mean that you’re pushing yourself into an undesired sale, but it’s a good idea if you want to obtain valuable information about your particular property.
Let’s take a look at our top four reasons for getting a property valuation:
1. For refinancing purposes
If your interest rate period is coming to an end or you’re looking at using a different lender, now would be a great time to get a property valuation. Your current lender may choose a valuer for the job, or it may also be done via a third party. However, this will largely depend on your own preference.
Homeowners often want to switch to a lender that offers lower interest rates, ultimately helping you save a significant amount of money. Other common considerations are to separate two cross-collaborating loans or to change interest rate options altogether – for example, from interest only to principal and interest.
Your valuation can determine how much bargaining power you have with a new or existing lender, and will influence the benefits that you can reap.
2. Wanting to buy an investment property
Buying a second property for investment purposes is on many homeowners’ bucket lists.
Using the equity in the home that you primarily occupy is a great way in demonstrating to a lender that you have enough collateral for an additional purchase.
In this case, most lenders will be happy to lend you over 80% of the purchase price. This eliminates the need to save a hefty deposit for a second time and can make life a lot easier, both in the short and long term.
Requesting a valuation will let you know what sort of position you are in to be able to buy your next investment property.
3. When you’re contemplating renovations
Even if you’re not planning on selling at the moment, it’s still important to know what your property is worth so that you don’t over-capitalise.
A new verandah, bathroom or backyard swimming pool can be costly, and a valuation can influence your renovation’s budget dramatically and can be used like a safety net before you overspend.
The main idea behind this precaution is for it to be utilised in order to actually make a profit after the renovations are complete. There wouldn’t be much purpose putting an expensive swimming pool in house located in a slumped market which is already difficult to sell at below market value.
4. For overall peace of mind
Worrying about financial problems down the track is common nowadays for most people.
A property evaluation can be a way of knowing early what your property is doing in terms of profit and loss. This can provide homeowners with the peace of mind knowing that they have plenty of time if any changes or even selling up is required.
It’s always good to know whether selling your home would leave you advantageous in the current market, and if not, you’re then able to take the necessary measures to turn things around.