Acquiring a home loan higher than 80% of the asking price is already a difficult task.
Going a step further and getting a home loan for more than the asking price is nearly impossible. However, there are rare situations where something can be arranged.
Loan to Value Ratio (LVR)
Most lenders use LVR to determine how much risk they are taking on if they decide to give you a home loan. Lenders will perform a valuation of your property to determine how it compares to the loan amount you wish to acquire. The lower the LVR, the more willing a lender will be to loan you the money you need. An 80% or higher LVR means that a lender will require you to pay for Lenders Mortgage Insurance (LMI) before they consider your loan application.
Therefore, before a lender could even consider loaning you more than the asking price, the home would have to be significantly more valuable than the asking price and loan amount. Your credit history and financial stability would also have to be absolutely perfect.
Using Another Property as Security
One situation where it may be possible to borrow more than the asking price of the home is when you provide the lender with security in the form of another property. This will guarantee the loan and make it possible for the lender to lend you 100% of the asking price plus any additional costs or repairs. A lender will usually never lend you 100% of the asking price if the loan is secured against a single property.
Getting a bank to lend more than the asking price is going to be extremely rare. But, having an experienced broker negotiate on your behalf could see you receive the loan you require.
If you would like to book time for a chat to discover whether this is an option for you, head here.