Remortgage refused by NR due to low valuation now what?

nickT

Our current mortgage deal with Abbey expires in just over a week. We were awaiting a new deal from Northern Rock but after waiting 3 weeks for them I have just received the valuation report. They have estimated the value at 170k and our mortgage is for 133k. On that basis they have refused a mortgage.

In my opinion they have undervalued our house by at least 20k even taking falling property values into account.

I just get the feeling they do not want new mortgages.

So what do I do now? Should I try and get a re mortgage with abbey? Will they use a different valuation? I know that they won't loan more than 75% of the house value so if they use the same valuation then we seen to be up the creak without a paddle.

We have a good credit rating and have never missed a payment. Our current mortgage is part repayment (73k) and part interest only (60k). 13 Years left to run.

Any advice would be most welcome.

herbiesjp

You could look at another lender

There are a few lenders offering similar rates to the NR one, with free legal fees and free valuations. So you could put in another application, and a valuation of around £178k and see if they agree the deal

Have you gone direct or via a broker?

matt83uk

What does zoopla.com report the valuation as (free)?

nickT

Thanks, I used a broker. I will have to do some quick shopping around I guess and also ask my broker to try again.

I just got an estimate from zoopla.com and it came back at 198k which is what I was expecting. This confirms my opinion the NR don't want the business.

herbiesjp

I think you'll find all valuations are coming in a lot lower than expected

Zoopla is only a guide - the surveyors who go round are the experts in the field and are reacting to the current anvironment of house price drops.

The same could happen with the next lender you go for - so if you submit the application with a value closer to the 75%ltv mark you may find a surveyor will just agree that figure

Trollfever

I know of a property that Zoopla values at £252k but has not sold at £180k.

Try Property-Bee for your area to find the truth.

getmore4less

Always best to ask your current lender what they will offer. that gives a base for any alternative deals.

dunstonh

I just used Zoopla and I reckon it has valued mine about 10-15% above realistic sale value. It values it more than my neighbour who is easily more expensive than mine. Zoopla is not at all reliable. Looking at other houses in the road, they are all about 10-20% more than realistic current price.

jonesMUFCforever

I have been told by a local estate agent that he uses Nationwide's property price index to help him do valuations.

monkeymaster

Trollfever wrote: »

I know of a property that Zoopla values at £252k but has not sold at £180k.

Try Property-Bee for your area to find the truth.

Property-Bee lists asking prices though most of which are completely unrealistic at the moment, there are houses on there that have been on for over a year and the price hasn't changed. The only way to get an idea of value is to use something like ourproperty.co.uk (land registry data) which uses actual selling prices but it tends to be a few months behind so this has to be taken into account.

Trollfever

monkeymaster wrote: »

Property-Bee lists asking prices though most of which are completely unrealistic at the moment, there are houses on there that have been on for over a year and the price hasn't changed. The only way to get an idea of value is to use something like ourproperty.co.uk (land registry data) which uses actual selling prices but it tends to be a few months behind so this has to be taken into account.

Fair comment.

Property-Bee does show the properties that are under offer. Only properties with realistic asking prices achieve this.