Would you pay the valuation fee 'at risk'?

FBF2007

I currently have a £215k mortgage fixed at 4.99% with the Halifax until the 12th July. The house was a new build purchased for £327,950 on 12th July 2007; at this time I had a LTV of 66%

I am unsure as to the value of the house now but a 15% decline from July 2007 would put it at about £280k, which would give me a LTV of 77%. Touch and go whether I will meet the 75% threshold [at the moment - who knows what will happen over the next 6 months but it is highly likely I will not meet the 75% LTV then]

I spoke to First Direct today about getting a mortgage offer which would be valid for 6 months, allowing me to switch on the 12th July when my Halifax fixed rate deal ends.

As my property is a new build the max LTV on their offset is 75%. However, according to the person I spoke to this will be based on the valuation they would do now and this would not be refreshed in July if I decided to take the product. Therefore by applying for a product now this would prevent future monthly declines in the value of my house being taken into account.

The sticking point for me is that there is a non-refundable £270 valuation fee and I am not sure I am going to meet the 75% LTV criteria now.

The alternative is to do nothing and then probably switch to the Halifax SVR of 4.5% when my fixed rate deal comes to an end.

At 4.5% my interest only payments would be £806 versus £607 with First Direct at 3.39%. However, the FD product would cost me a valuation fee of £270 + a £799 product fee. I therefore need to be on the FD product for at least 6 months before I break even versus sticking with Halifax.

Therefore would you apply for this prduct and incur the £270 fee at risk for the benefit of saving in the region of £200/month once you are 6 months into the FD mortgage?

If it makes the decision any easier, I could probably find about £10k-£15k to pay off against the mortgage if I just miss out on the LTV required for FD.

bacardi.

if you get the valuation now, and are close to the 75%, would you be able to save up the difference and put it into the mortgage, at the time of the swap to FD?

FBF2007

bacardi. wrote: »

if you get the valuation now, and are close to the 75%, would you be able to save up the difference and put it into the mortgage, at the time of the swap to FD?

Should be able to get £10k-£15k together but this would remove my rainy day fund.

Trollfever

The sticking point for me is that there is a non-refundable £270 valuation fee

You are worried about a £270 fee when your property is probably dropping in value by £800 a week?

.

FBF2007

Trollfever wrote: »

You are worried about a £270 fee when your property is probably dropping in value by £800 a week?

.

It does seem disproportionate when you put it like that but the house we have bought is our family home and I expect us to be here for the next 20 years. As long as I stay in positive equity I am not worried by the weekly decline in value.

Now current cash flow is something I am more worried about and there are many other things I could do with £270. I'd be particularly disappointed if I splashed this out and then found out I wouldn't be able to get a sufficient mortgage from FD to switch from Halifax.

I guess you are saying almost don't be stupid and pay the £270 because your house is losing £800/week?

FBF2007

Mortgage offer received from FD in the post today (it was confirmed) via text message on Monday.

A positive experience from start to finish, taking just under a month to get the offer in place from my inital. Only have good things (so far) to say about FD and now just need to wait until the 1st July for my current fixed product to expire with the Halifax.

I was apprehensive about the valuation but the valuer agreed with the figure I had proposed of £290k. I just met the 75% lending criteria by the skin of my teeth. I'm also reasonably happy that the loss since purchase in July 2007 is only around 12%.

If you want to get a new product secured up to 6 months in advance then I would recommend considering FD.

jayremoh

FBF2007 and trollfever

my house was valued at 180k in december but i required 75% ltv

i have now found a mortgage which only requires 80% LTV, had my house valued again and it still came back at 180k

thats precisley £0 drop in over 2 months

and a 10k drop in 2 years, 3 months

1st application was nationwide and countrywide
2nd application was first direct and Shephards

make of that what you will.




sorry just seen youre sorted.