Incorrect valuation to remortgage

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catoutthebag
catoutthebag Posts: 2,216 Forumite
in Mortgages & endowments
My 2 yr fixed is coming to an end in April with nationwide. I bought my flat at 88.5k on 90% LTV. I have been paying £396 at 3.3% something
They are telling me it's only worth 94.5 based on prices index. This I think they said is 80% LTV and on 2yr fixed with £999 fee 1.64% is £334. £250 cash back.

I have not seen properties sell this low here. They are going for 105-110k based on zoopla, right move etc

Nationwide won't change that value. What do I do? Do all lenders use this inaccurate method to disadvantage the borrower?

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  • davidmcn
    davidmcn Posts: 23,596 Forumite
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    catoutthebag wrote: »
    What do I do?
    Pay for a valuation, if they have that option?
    Do all lenders use this inaccurate method to disadvantage the borrower?
    The fact it's a broad-brush indexation figure isn't going to "disadvantage" borrowers on average, is it? i.e. your property might be worth less than the 94.5k they're guessing it is.

    Anyway, no, many lenders will use more specific valuation methods, up to and including having a surveyor wander round the house poking at things.
  • catoutthebag
    catoutthebag Posts: 2,216 Forumite
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    Thanks

    I'm.confused as to what I put in the 'amount to borrow' in comparison sites based on the 94.5 k property value?
  • Keezing
    Keezing Posts: 322 Forumite
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    edited 2 March 2017 at 12:02PM
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    catoutthebag wrote: »
    I have not seen properties sell this low here. They are going for 105-110k based on zoopla, right move etc

    Nationwide have their own general house price index which is very well regarded.

    You can actually test it here: http://www.nationwide.co.uk/about/house-price-index/house-price-calculator

    If you don't like their valuation you can pay for a formal inspection. This comes with risks as if they value it at lower than the index the new lower valuation will be used.
  • Keezing
    Keezing Posts: 322 Forumite
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    catoutthebag wrote: »
    Thanks

    I'm.confused as to what I put in the 'amount to borrow' in comparison sites based on the 94.5 k property value?

    The amount to borrow is how much you have left to clear your current mortgage.

    So if you value the property 100k and you have 80k left to pay, you will borrow 80k at 80% LTV.
  • catoutthebag
    catoutthebag Posts: 2,216 Forumite
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    Keezing wrote: »
    The amount to borrow is how much you have left to clear your current mortgage.

    So if you value the property 100k and you have 80k left to pay, you will borrow 80k at 80% LTV.

    What if it's not a round figure like 80%, like 78%, 83% etc, will they still use a specific rate?
  • catoutthebag
    catoutthebag Posts: 2,216 Forumite
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    Keezing wrote: »
    Nationwide have their own general house price index which is very well regarded.

    You can actually test it here: http://www.nationwide.co.uk/about/house-price-index/house-price-calculator

    If you don't like their valuation you can pay for a formal inspection. This comes with risks as if they value it at lower than the index the new lower valuation will be used.

    How will they know I've done an independent valuation and how much does it cost?

    Regardless how well regarded it is, its inaccurate when properties in the last 12-18 months have not sold that low and when I've done interior work to add value which they don't count as it's not structural work which I can't even do as it's a flat, it really is pathetic of them
  • Keezing
    Keezing Posts: 322 Forumite
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    catoutthebag wrote: »
    What if it's not a round figure like 80%, like 78%, 83% etc, will they still use a specific rate?

    Generally mortgage bands are in 5% increments.

    If your LTV is coming in at 78%, you will get the 80% LTV rates because you don't yet qualify for the 75% LTV rates.
  • Keezing
    Keezing Posts: 322 Forumite
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    catoutthebag wrote: »
    How will they know I've done an independent valuation and how much does it cost?

    Regardless how well regarded it is, its inaccurate when properties in the last 12-18 months have not sold that low and when I've done interior work to add value which they don't count as it's not structural work which I can't even do as it's a flat, it really is pathetic of them

    You pay Nationwide to arrange the valuation. It's normally around £300, but they will confirm if you call and request it.

    Good luck!
  • kingstreet
    kingstreet Posts: 38,784 Forumite
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    FAO Muhandis
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
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