property "down valued" ?!?! PLEASE HELP

sunflower_2 · 13 April 2006 at 9:23PM

hi -
i had a mortgage agreed for £112,500 with a 10% deposit, meaning i could purchase a property of upto £125,000
the credit checks were all completed and i received my agreement in principle stating the 90% etc etc

the house i am buying was up for sale for £128,500
my offer of £127,000 was accepted, i am to pay the extra £2k in cash

i received an email today from the broker saying that the property had been "down valued" at £125,000 and therefore the lender is only able to offer a mortgage for £106,250?!?!?!

but £106,250 is only 85% of £125,000?

i am hoping someone has just made a mistake, maybe getting confused because £112,500 isnt 90% of £125,000 so they therefore thought i was getting a 85% mortgage?

has anyone any thoughts on this?

trouble is its now easter weekend and I am going to be worried sick til Tuesday.
there is no way i can find an extra £6k

where do i stand with the vendor if its been valued £3.5k lower than they were asking?

i really want this house. :eek:

Doozergirl · 13 April 2006 at 9:36PM

You're sitting right on the new Stamp Duty threshold of £125,000 there. It's no real wonder that it's been down valued by the surveyor as there are not going to be many people out there at the moment willing to pay £128,270 (including Stamp Duty) for a house with a £128k asking price when an offer of £125,000 has no Stamp Duty to pay at all.

Did you make your offer before the budget? I'd try to renegotitate with your vendor in a downwards direction over the weekend - try for the full £2,000 and they will hopefully come down to that, if not, meet you halfway. They're in an awkward postion as they will be lucky now to get anymore money from another purchaser.

I'm sorry I can't workk out why they've offered you 85% if you had agreed 90% beforehand. Hopefully one of the mortgage advisors will be able to shed some light for you if it isn't just a straightforward admin error.

sunflower_2 · 13 April 2006 at 9:45PM

thanks very much for reply Doozergirl

i was racking my brains trying to understand why the surveyor would bother to "down value" for the sake of "2k
but from what you say - maybe he thought he was doing us a favour?
heres me calling him a jobsworth.... he he

thing is - the area is exempt from stamp duty upto apx £150k so i dont have to pay it on the £127k anyway

have been searching the net and the lender defo does 90% mortgages, and all my corres state this is what they are offering....

am defo thinking someone has just got confused about the extra £2k that we are paying cash - especially with it being the easter weekend etc

but there is always that little doubt which will keep me awake all night
have only got apx 7 weeks to go til my new baby comes along, i dont need the stress

Ian_W · 13 April 2006 at 10:15PM

Goodness sunflower, you don't do things by half having a baby and buying at house at the same time!!
This sort of thing usually only arises when they've initially offered you say 90% of the asking price but the valuation comes in lower, in which case it's 90% of what their valuer says. I can't understand what they're playing at cos even if you haggle the vendor down to £125K you're still over £6K short of a 90% mortgage. I can only presume it's some sort of mistake by the broker/lender. I certainly wouldn't worry about it over the long weekend, I'm sure you'll be able to sort it out after Easter.

Doozergirl · 13 April 2006 at 10:43PM

sunflower wrote:

thing is - the area is exempt from stamp duty upto apx £150k so i dont have to pay it on the £127k anyway

I had a feeling you were going to say that when I was typing! Does your surveyor know that? It might be worth a word to see if he will value it at £127,000 on that basis (if that £2k makes much difference to you) I've had a letter today from an EA saying that because we're purchasing a flat at £127,500 that we'll have to pay SD - and they're a local agent; they of all people should know it's an exempt area. :rolleyes:

sunflower wrote:

but there is always that little doubt which will keep me awake all night
have only got apx 7 weeks to go til my new baby comes along, i dont need the stress

:T How exciting! My baby has her first birthday in a week and a half. You'll wonder where the time went when you're sitting in your new(ish!) home being used as a climbing frame! Good Luck.

Feej_2 · 14 April 2006 at 3:58PM

Hi Sunflower,
You have my sympathy - moving's hard enough without all the extra crud you have to sort out. As you've got it in writing I'd treat it as a mistake on their part. Ring tuesday and explain, and ask for a replacement letter containing the correct info.

We've just remortgaged and its taken an extra 3 weeks and numerous calls to get the redemption statement issued without an early repayment fee included, despite having in writing that it was not due. You may find it takes some persistence to get it sorted but hang on in there.

Hopefully your broker can sort this for you, but if you and up calling the mortgage company direct, never assume that the people at the mortgage company know as much as you do about your finances - they can be inexperienced and undertrained. Keep a note of any call including the person's full name, department and job title so you can create your own 'audit trail' if you need to.

Until then, relax and enjoy your easter, and all the best with your move.

Feej

mummytofour · 14 April 2006 at 9:47PM

sunflower wrote:

but there is always that little doubt which will keep me awake all night
have only got apx 7 weeks to go til my new baby comes along, i dont need the stress

I just wanted to wish you well as I have just moved 3 weeks ago and my baby is due in 12 days :eek: I hope this can be sorted out for you very soon and good luck.

Vxx

Doozergirl · 14 April 2006 at 10:04PM

mummytofour/five,

Come and tell us on this board when your spring lamb :heartsmil arrives please. You've become a piece of the furntiture over here and I'd love to know when the time comes. :grinheart

Good Luck with the imminent arrival - I don't suppose you'll be needing any advice on labour and childbirth! lol

MortgageMamma · 14 April 2006 at 10:24PM

Sometimes lenders will reduce a loan to value on a mortgageoffer due to credit rating/affordability, first active are terrible for this, but it could well just be an out and out mistake.

Dont panic or worry about it, and good luck with the little one. I have 3 and only wish I could have just one more! let us know how you get on!

sunflower_2 · 15 April 2006 at 10:11AM

thanks for all kind replies

i am trying to be calm about it all !!!

MortgageMamma - the credit searches and everything have already been done and we received the agreement in principal saying:

"The lender has conducted a credit search and credit scoring and is happy to agree to a mortgage loan for a maximum of £112,500 under reference number ********* subject to a minimum deposit of 10%"

it seems as though they have based their new calculation on us paying a deposit of 15% purely on the property being valued at £2k less

i do think someone has made a mistake but i am annoyed that they didnt realise that a down value of £2k can mean offering £6k less? what school did they go to?

we were talking yesterday and cant raise the extra £6k so would have to try another lender if its not a mistake

but we paid £315 for the valuation based on their offer of 90% mortgage?
surely this isnt fair?

stanmoresaver · 15 April 2006 at 12:17PM

Like MM , i think this could well be a mistake that the broker hasn't picked up on. If you post (pm if you prefer) the lender's name and one of the brokers on here will probably be able to shed some light- If not phone your broker on tuesday morning and ask him/her directly!

Good Luck

SS

property "down valued" ?!?! PLEASE HELP

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