Can I value house higher?

g0dfather

We bought a new house late last year (offer accepted Sept, completed Dec). Basically it was a new development by a local builder of 8 very high quality houses.
None of the houses had sold and the builder had basically run out of money, so accepted around 20% off the listed price for our house.

To buy the house, we ported our old mortgage, but now we're looking at remortgaging to get a better rate and we'd like to try to get to the 25% LTV rates (rather than 20% currently).

We really do believe the house we've bought is worth quite a bit more than we paid and got a better deal becuase of the builder's financial situation - however that doesnt necessarily mean someone else would value the house higher!

The question is, can I apply for a new mortgage with a different lender and put a new valuation down on the application form (rather than what we paid) to increase the LTV rate to 25%?

Will this work, (would they do a proper valuation) or would they simply take what we paid for it?
It may be worth mentioning that some of the houses in the development are still for sale - around 15% more than what we paid.

Any help or advice would be appreciated!

_Andy_

A valuation will be done so no, you can't dictate what the value is.
You'll almost undoubtedly find a professional valuation comes up less than what you think it is worth.

g0dfather

Thanks for your reply Andy. This leads to me two more questions however!

1. How will the professional valuation be done? will they look at asking/selling prices of similar house in the neighbourhood, or just use what we paid for it last year and increase by however much they think prices have increased by in recent months?

2. When you've had a mortgage for some time and choose to remortgage - how do you apply for a new one if you don't know the current value of the house? i.e. it will depend on the LTV ratio what products are available and you wont know this until the professional vaulation is done- which can't be done until you've applied for the mortgage product! it seems like a chicken and egg situation to me!!

beecher2

I thought that you had to wait 6 months to be able to remortgage - can you do it only a month after moving in?

since you bought so recently I'd think that the price you paid would be close to the valuation - the value is only what someone thinks a property is worth after all.

g0dfather

I'm able to remortgage immediately becuase I had ported an existing mortgage from my last house and am already past the early repayment charge deadline.

I was hoping the valuation would be higher, as we only got such a good deal becuase of the builder's financial problems last year. Also, when we bought the house - the survey actually valued the house slightly higher than what we had agreed to pay!

beecher2

Ah I see - well hopefully the survey will come back with that slightly higher valuation then as it won't have taken into consideration the builder's financial problems, but I wouldn't bank on it being much more - new houses lose value as soon as you walk into them.

VIGILANT22

beecher2 wrote: »

Ah I see - well hopefully the survey will come back with that slightly higher valuation then as it won't have taken into consideration the builder's financial problems, but I wouldn't bank on it being much more - new houses lose value as soon as you walk into them.

Lenders also have reduced LTV'S on new builds...and they will insist on instructing a surveyor fom their own panel....

g0dfather

Right that makes sense. It may be worth my trying it then as I'd only lose out on the valuation fee in the worst case?

i may also be able to put a bit more capital into it if needed

MrsTinks

The problem you might have is that the builder is struggling to offload other identical/similar properties in the same build... that would mean SHOULD you want to sell there is a lot of competition and for the same price/not a lot more they can have a brand new house and probably pick a few of the interior things too... and there would be no chain etc etc etc
Whether a valuer would take this into account I don't know... sorry

g0dfather

Thanks I hadn't really considered that. On the upside all of the houses are different in the development and the ones which haven't sold are listed as more than £100k higher than what we paid for ours!