Eileen just bought a sub-sale double storey house. After signing sale and purchase agreement and bank’s loan facility offer letter (“Offer Letter”), she found that there is a clause allowing the property’s valuation price to be varied at any time before loan disbursement. However, she was advised by the bank officer that this will not affect her loan facility.
Is that true?


Generally, banks will first grant an Offer Letter based on the purchase price of the property as stated in the sale and purchase agreement. However, the banks will also build in a clause allowing the valuation of the Property be varied based on the valuation conducted by its appointed valuer. Such variation to property valuation can happen even after the borrower having signed the Offer Letter.
It is not true that a variation to the property valuation will not affect the loan facility, as the loan is granted by the bank based on its value. In short, should the property valuation be adjusted downward, the total loan amount will normally be reduced accordingly.

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