Re-Mortgage - Valuation

ste_81 · 9 April 2014 at 12:47PM

Hi There,

New in the forum today.

Our fixed term mortgage has come to an end and I am now at a point of remortgaging however I'm a little stuck with the valuation and looking for a bit of advice.

When we bought the house a couple of years ago, it was a project to say the least and in the past couple of years we've replaced the electrics, the boiler and the bathroom and taken care of any structural issues. All that remains now is cosmetic so in real terms we still have a lot of skimming of walls to do and decorating. When I've been back to our mortgage providers they have only increased the value of the property by £5k which is £20k less than the estimates (and I appreciate these are exactly that; estimates) of sites like Zoopla. I'm now thinking it would be worth paying the mortgage provider the £75 for a full survey if it would give us a better valuation. My question is, if we get a valuation, are we likely to be penalized in value for the fact some rooms still need decorating and some need carpets?

The reason the valuation is so important is that we have worked very hard to reach 20% equity and the valuation will define what our shortfall to this equity level is.

One final point which might help is that the mortgage provider is valuing our house based on the Halifax Price index. I'm not quite sure how this works though.

Any help would be highly appreciated.

Thanks
Ste

dimbo61 · 9 April 2014 at 2:01PM

What are you hoping to achieve?
New mortgage deal at 75% or 80% LTV !
How are local house sales and prices going ?
New electrics and old electrics NO Difference
New boiler or old boiler ( Very little)
New bathroom will help to sell but will it add value ?
If you are not in a fixed period could you look at a new lender with FREE valuation, FREE Legals, and a FEE FREE deal!

kingstreet · 9 April 2014 at 2:09PM

First, the terminology.

You are asking your lender for a customer retention product, not a remortgage. If you confuse this, you and others reading this can end up in a product blind-alley as your lender's "remortgage" products are for new borrowers only.

When taking a customer retention product, the lender normally uses an indexed or desktop valuation system. You may have the option of paying for a drive-by, or internal inspection if you think your valuation might be higher as a result.

Alternatively, you can look at a remortgage. This process involves you finding a new lender, willing to led the amount you want on the terms you want and this new mortgage repays the old one with your current lender. There may be costs for this new mortgage, or it may be totally fee-free. There may be a cost to leave your existing lender.

You should fully compare the products open to you both as an existing borrower of your current lender not moving home with the remortgage options you have as a new borrower to a new lender to see which is likely to suit you best.

A whole market broker can compare your existing borrower offers and find you remortgage options as well. Ask friends and relatives for a recommendation.

ste_81 · 9 April 2014 at 2:19PM

dimbo61 wrote: »

What are you hoping to achieve?
New mortgage deal at 75% or 80% LTV !
How are local house sales and prices going ?
New electrics and old electrics NO Difference
New boiler or old boiler ( Very little)
New bathroom will help to sell but will it add value ?
If you are not in a fixed period could you look at a new lender with FREE valuation, FREE Legals, and a FEE FREE deal!

Thanks for responding Dimbo.
-Aim is for 80% LTV - I'm currently £4k shy of this in terms of the current lender's valuation and have the money to close this gap however I'd rather use this cash to finish renovating the house.
-In terms of house sales I'm not sure. The only place I have checked is Zoopla and ours was the last recorded sale on within the post code catchment.
-I had taken some advise from a mortgage adviser who is unfortunately not around to advise further (travelling) who believed the taking into account the offer made by my current lender, the exit clause and other deals, it would be ideal to remain with them.
-This adviser's opinion was also that he thought the valuation given was low.

I suppose my greatest concern would be that if I were to pay for a valuation it might come out lower based on the fact there is still some cosmetic work to do.

Going back to Zoopla, it estimates a value increase for our post code of 3.78%. I'm just not sure how much confidence one should put in websites like this.

ste_81 · 9 April 2014 at 2:26PM

kingstreet wrote: »

First, the terminology.

You are asking your lender for a customer retention product, not a remortgage. If you confuse this, you and others reading this can end up in a product blind-alley as your lender's "remortgage" products are for new borrowers only.

When taking a customer retention product, the lender normally uses an indexed or desktop valuation system. You may have the option of paying for a drive-by, or internal inspection if you think your valuation might be higher as a result.

Alternatively, you can look at a remortgage. This process involves you finding a new lender, willing to led the amount you want on the terms you want and this new mortgage repays the old one with your current lender. There may be costs for this new mortgage, or it may be totally fee-free. There may be a cost to leave your existing lender.

You should fully compare the products open to you both as an existing borrower of your current lender not moving home with the remortgage options you have as a new borrower to a new lender to see which is likely to suit you best.

A whole market broker can compare your existing borrower offers and find you remortgage options as well. Ask friends and relatives for a recommendation.

Thanks for the reply Kingstreet.

Thank you for the correction. I have explored both options and the view I have now (having previously spoken to a friend who is a mortgage adviser) decided I would prefer to stay with the current lender so this is a case of a retention product. They have offered three options in terms of valuation...

1) Price Index
2) Basic search
3) Full valuation

From internet research (Zoopla) I get the impression house values have increased in our area and as a result I am tempted to get a full valuation however I was nervous about doing so if there was a risk that having someone come INTO the property and see that it looks a bit shabby might de-value it more so that the original price index offering.

So in terms of another lender or my current lender, I wish to stay with the current lender. My nervousness is around getting the best valuation. I've written a bit more about my target in my previous response.

Thanks again.

kingstreet · 9 April 2014 at 3:18PM

AFAIK lender use HomeTrack to value property based on HPI data. You can pay £20 and have your own, if it helps;-

http://www.hometrack.co.uk/our-services/analytics-reports/property-valuation-report

tigsly · 10 April 2014 at 1:08AM

ste_81 wrote: »

Going back to Zoopla, it estimates a value increase for our post code of 3.78%. I'm just not sure how much confidence one should put in websites like this.

Zoopla estimates can vary wildly..

According to Zoopla there is over 10K difference between my semi - and the one its attached to, If you looked inside and at the state of repair you would know this was wrong!

Also if you start tracking 'zoopla guesses' and sold prices (i am a nerd) they can be 'far' out - somethings selling for 100's over or under the 'prediction'..

IME - state of repair has a massive impact on value .. even by local EA - I personaly thing 'dressing' comes a long way to having impact.. so 'unfinished' would make your house worth far less..

I would look carefully at sold prices.. and if the valuation - is within a 'range' of those that have sold around you... i'd suck it up - pay the 4k (If the deal was better than other 'remortgae options.. and the rate was wroth teh 4K pay out..)

amnblog · 10 April 2014 at 9:33AM

ste_81 wrote: »

-I had taken some advise from a mortgage adviser who is unfortunately not around to advise further (travelling)

This old chestnut.

How do brokers expect to provide a service if there is no-one covering when they are not around?

Dave_Ham · 10 April 2014 at 9:58AM

Agreed, is there a reason why you have decided to stay with your current lender.

All of the fears on valuation become superficial as most lenders will offer free valuation (solves your problem) free legals and likely if not certainly to be a better rate than the Halifax retention product?

Re-Mortgage - Valuation

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