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Debate House Prices
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Lenders mark down house prices
baby_boomer
Posts: 3,883 Forumite
Sunday Times
If you shop around for a mortgage after exchanging contracts, you might get a nasty shock.
Down valuations are particularly hitting remortgaging. The deals may be less attractive if the remortgage is suddenly found to be worth more than 75% of the revalued home.
Some of these mark downs are reportedly as high as 30% according to the ST. It will be worth watching these figures in future, to compare with the future Nationwide or Halifax house price predictions.
"...Kulwant.....fell victim to a down valuation and had to find £30,000 to cover her share of the mortgage on a home in Dulwich, south London. An initial valuation by HSBC put the prospective home at £605,000 in November. She had already exchanged contracts when she found a cheaper mortgage with Abbey at 5.24%. Although Abbey valued the home at £525,000 she was bound to buy at £605,000."
If you shop around for a mortgage after exchanging contracts, you might get a nasty shock.
Down valuations are particularly hitting remortgaging. The deals may be less attractive if the remortgage is suddenly found to be worth more than 75% of the revalued home.
Some of these mark downs are reportedly as high as 30% according to the ST. It will be worth watching these figures in future, to compare with the future Nationwide or Halifax house price predictions.
"...Kulwant.....fell victim to a down valuation and had to find £30,000 to cover her share of the mortgage on a home in Dulwich, south London. An initial valuation by HSBC put the prospective home at £605,000 in November. She had already exchanged contracts when she found a cheaper mortgage with Abbey at 5.24%. Although Abbey valued the home at £525,000 she was bound to buy at £605,000."
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Comments
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I've never heard of anybody shopping around for a mortgage after exchange. In fact, I can't see that that should be part of the route for anybody.
At exchange the solicitor's done all the work and knows the money's in place and when to draw it down. I'd imagine it would be a rare purchase if you had time to apply for another mortgage and get the survey/paperwork done on time to meet the completion.
How odd. Unless that is on new builds.
Nothing in that article we don't know though. This isn't news, it's column inch covering.0 -
baby_boomer wrote: »If you shop around for a mortgage after exchanging contracts, you might get a nasty shock.
It would be impossible to shop around after exchange because you would never get through through the red tape in time, i.e. the Solicitor has to order the money for completion day well in advance.0 -
ouch
Hopefully this will filter into peoples perceptions and accelerate the crash 0 -
This would usually only apply to a new build purchased off plan.Trying to keep it simple...
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Thanks EdInvestor. That might explain the phrase "prospective home" and the odd time-scale.
New build off plan? Not many of those in Dulwich.0
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