Property Valuation

Corporalis

Hello everyone, I hope some one can help me.

We have recently come out of a three year fixed deal with alliance & leicester and have ridden the SVR for a while because it was lower than what we were paying, that and the fixed rate offers just weren't an affordable option (I did a lot of enquiring at the time). What with the likely-hood of the English base rate threatening to creep up at some point this year I thought I'd better bite the bullet and see what was on offer. Unfortunately, it seems nothing. A&L value the property a couple of thousand less than the mortgage we currently have on the property, therefore putting us in negative equity with the only option being to remain on the SVR.

Now I know a little bit about property values in the area and I am fairly certain our property value is not as low as A&L have determined using the predictive software available to them. I asked them if they would come and do a valuation as I know this used to be a service they offered for a charge, but the said they no longer provided that service any more and eluded to the fact that it wasn't in their best interest to offer us a mortgage. I also offered to pay a lump sum to at least get us out of negative equity, but they said that only by paying 20% of the mortgage would we once again become a viable prospect for them.

So I'm thinking my only options are to get a property valuation see what they come up with and hope it's enough for us to possibly move lender (although I'm not sure it'll be significant enough) or bargain with A&L although after the recent conversation I think it's highly unlikely. Or alternatively keep overpaying on the mortgage and hope that we eventually become viable once again.

Does anyone have any ideas or advice as I could really do with some...

Many thanks

somethingcorporate

Not an easy situation to be in and I sympathise.

Given your level of valuation what loan-to-value do you think you have?

If this is not less than 90% then you really have no choice but to stay put and keep trying to negotiate a deal with A&L.

Corporalis

Well I think we can get to 90% maybe with us supplying a lump sum to make up the excess, but I'm not sure that A&L will accept a valuation that we obtain independently, but it's worth a go I would have thought.

I think a valuation is the way to go for now and see what that brings (hopefully some clarity and the opportunity of other lenders) and if that doesn't work out stick with the overpaying method and see what happens.

flammable999

while we are on the subject, I'm a bit new to the game. If you get a valuation before going to the lenders and have proof, will this suffice? or will lenders insist on doing a vaulation through their own partners in general?

JA1000

Lenders will only let you use their appointed valuers, if that is Esurv then all I can say is good luck, they just under value everything to cover their ar*se. Undervalued mine by £75k to quote "it is worth £300-£325k but I'll put it at the threshold of £250k.

If you have reverted to a SVR then you will be very lucky to beat, it I would stick with it overpay if you can but keep a reserve as you will not be able to pull that out of the mortgage at the current LTV so emergency fund is important.

Sit back and wait for the market to pick up which will only be when the underwriters at all the banks get a life and get in the real world and stop living 18 months ago.

Radiantsoul

I think you would probably be better off using the money you would pay for a valuation to overpay the mortgage. Even if you get a higher valuation a mortgage company will most likely seek its own.
It seems that your position is not that strong to negotiate.
I would say base rates might not move up too quickly and fixed rates are quite high and unlikely to move up with base rates.

wodgerdodger

There's absolutely no point in getting an independent valuation your Lender won't accept it and in any case your valuation is likely to be a "marketing " based one whereas the Lender would be looking at a "forced sale" valuation.
I am surprised though that when looking for a new product they suggested the value was less. In my experience the department which looks after product transfers at A&L looked at the account conduct and the valuation showing on the system would be the one last used presumably when you bought it. If you were applying for further borrowing then they would re appraise the value and refer to the Halifax property index. So if similar proerties in your area had reduced on average by say 25% then that would be applied in assessing further borrowing.
As it is you have an ongoing mortgage paid up to date so would have thought they would have given consideration to a new product without referring to the LTV.

Corporalis

Thanks everyone for your advice.

wodgerdodger: I was fairly surprised the property was valued as low as it has been, especially that it was lower than when I enquired six months ago and the value of other flats in the same block have gone for 15 - 20% more than what A&L value our property at, but I guess I just have to accept that.

I'll continue with over paying on the mortgage for now and see how it goes.

Cheers

Hugbubble

wodgerdodger wrote: »

I am surprised though that when looking for a new product they suggested the value was less. In my experience the department which looks after product transfers at A&L looked at the account conduct and the valuation showing on the system would be the one last used presumably when you bought it.

As it is you have an ongoing mortgage paid up to date so would have thought they would have given consideration to a new product without referring to the LTV.

Agreed. I am in the process of remortgaging with my current lender (RBS- they have the best deal for 5 yr fixed for existing customers) and they just calculated the ltv using the price I bought the flat at 2 years ago