Doing an extension - new valuation of house is very low causing problems with LTV

wdyw

JosephCoyle wrote: »

We currently have a mortgage of £170k on a house we purchased for £190k in 2005. We had the house valued in early 2007 at 300k for a change from variable to lifetime discounted variable mortgage.

So we hoped to borrow the 85k from the bank (that we are presently with).

The bank have came back indicating that the house is worth £190k at present and £230k after the extension!!

Therefore they are saying they can only lend (230*0.8) = 185k minus the existing mortgage 170k = 15k!!

The survey was a drive by and I am livid with the surveyors for their foolish estimation. While I realise the market has slowed I feel that surveyors are now valuing houses at much smaller amounts to try and stimulate buying in the market - which is fine but this is an extension.

I fear the worst in that their current valuation is going to be close to the current value (internal condition is not going to make a huge difference). Unless I'm mistaken I believe we are talking about a property in N.I and while the mainland is talking about house prices falling by 15% from their peaks in early 08, in N.I. house prices have been hit harder and longer from their peak summer 07 values. Certainly around Lisburn 30-40% drops have been fairly normal.

JosephCoyle

and306 wrote: »

A couple of years ago when i was re-mortgaging, the new company did a drive buy valuation and the they didn't value you the house at what i would have expected compared to other houses in my area.I phoned them up and asked for a proper valuation ie inside the house and they valued it at £15,000 more.It might be worth phoning up and asking them to do a proper valuation,not sure what would happen with the current credit climate,hope this helps

Getting it valued today as suggested with me walking the surveyor around and taking him through the plans..... lets hope he likes tea and Chocoltae biscuits lol

Sorry to all those guys I got cross with last night - i'm just so frustrated that 2 people on a compbined salary of 120k can't get an extra 85 grand...

JosephCoyle

wdyw wrote: »

I fear the worst in that their current valuation is going to be close to the current value (internal condition is not going to make a huge difference). Unless I'm mistaken I believe we are talking about a property in N.I and while the mainland is talking about house prices falling by 15% from their peaks in early 08, in N.I. house prices have been hit harder and longer from their peak summer 07 values. Certainly around Lisburn 30-40% drops have been fairly normal.

Spot on - a house in Northern Ireland - South Belfast (not Malone rd) next best area... I agree with all comments - house prices in NI were totally overflated.... we'll see what happens!

maryjane01

In the current climate I would be asking yourself how long you can live without the extension and save a bit more to do as much of it with cash as you possibly can. You may as well use your savings to do the extension because savings aren't earning any interest at the moment anyway.

We did a loft conversion last year, costing a total of just over £40k, we used savings, but we did not have quite enough, and we still have about £10K on credit cards, which is all 0% interest or very low interest. We should have it all paid off by the end of the year. We bought everything we could on credit cards eg. lectrical and bathroom fittings, so we could pay our non VAT charging builder cash.

If you consolidate into your mortgage it will take so much longer to pay off, doing it the way we have we are making more in credit card/mortgage payments combined than if we had just increased our mortgage and made 1 monthly loan repayment, but we will have fully paid for our loft by the end of the year.

Be creative about how you can get the money together, and maybe delay getting non essentials (we still don't have new carpet!).

Now is not the time to be stretching yourself financially unless it is really essential.

tyllwyd

Why not scale down your plans, and put the new garage, patio, garden etc on hold and just get the basic building work done. That way you might be able to get the price down a bit, closer to what you can get your lender to value it at. Then when it's built, you might be able to get it revalued and remortgaged to raise money for the rest of the work - or you should be able to save enough to get it done in the next few years.