Mortgage valuation - can they base it on future improvements??

kmmr

jill2002 wrote: »

This has happened because you do not have the equity to be allowed to borrow the funds without the work being done - therefore your loan is being done on a 'when finished' basis.

Oh yeah, I do understand that. Makes perfect sense of course - I'm more shocked that they would ever in the past have paid out before the work was done!

Mildly frustrating, as in the interim I have to run up credit card bills for a year... but such is life.

jill2002

kmmr wrote: »

Oh yeah, I do understand that. Makes perfect sense of course - I'm more shocked that they would ever in the past have paid out before the work was done!

They would have only have paid out in the past if there was sufficient equity to do the loan with the property in the present condition ie before the work was done.

Samtobuk wrote: »

The valuation probably will be under the maximum lending that we are putting on the initial application, in which case our advisor said that we will then just have to quickly amend the form to the correct value and that is that.

Not really sure what you mean by this, but I assume that you are putting the application in for the maximum purchase price that you are prepared to go up to - and the mortgage amount at 90% of this. Then it will be amended if you actually get it for less, with the mortgage amount then being 90% of the purchase price.

Samtobuk wrote: »

Beyond that, we will have about 10 days to get the formal offer out to make it in time for March 2nd.

No problem !! Valuer will issue the report to the mortgage centre overnight when done and the offer will be issued the following day (assuming there are no major problems of retentions or further reports required).

Samtobuk wrote: »

Jill - can you confirm just to make it 100% for me that once you have a formal offer, that is a done deal and there is no risk at all of Santander backing out the next week when I come to draw on the funds?

It is no different to buying a house through the normal route. There are no further checks to be done. So unless there is something that you have not divulged at application stage there is no going back.

Samtobuk wrote: »

Likewise, are they likely to want to see anything from the legal pack/searches, or is that all just on your own shoulders to check as the buyer??

This is a job for the solicitor. Santander will not normally get involved in the legal work - your solicitor will be doing some work for Santander as well as you ensuring that everything is ok.

Samtobuk

jill2002 wrote: »

Not really sure what you mean by this, but I assume that you are putting the application in for the maximum purchase price that you are prepared to go up to - and the mortgage amount at 90% of this. Then it will be amended if you actually get it for less, with the mortgage amount then being 90% of the purchase price.

No problem !! Valuer will issue the report to the mortgage centre overnight when done and the offer will be issued the following day (assuming there are no major problems of retentions or further reports required).

It is no different to buying a house through the normal route. There are no further checks to be done. So unless there is something that you have not divulged at application stage there is no going back.

This is a job for the solicitor. Santander will not normally get involved in the legal work - your solicitor will be doing some work for Santander as well as you ensuring that everything is ok.

Thanks once again Jill, great insight.

What I meant regarding the value of the loan is that we have applied for the maximum lending that we can get/are prepared to spend on the new place. If however, the surveyor this week values the house at less than what we are asking for (85% LTV), then Santander are not going to lend us that maximum, and we will have to revise our maximum bid.

This was the reason for asking the original question in this post, as the valuation will limit our maximum bid when we get to the auction.

I will get onto my solicitor first thing monday and get the vendors legal pack to him straight away (and put Santander in touch with him directly).

Right, off to the bank to get this application out of the way and lets hope it all runs to plan.

Thanks again.

Samtobuk

Well, back from this afternoon's appointment.

Checked and checked again regarding the process from here on in, and the timings. Valuation will happen within the next three days. Once the value is back to Santander, they will issue the formal offer unless there are any significant issues with the property (which I am pretty confident there won't be having had my builder give it a thorough once over).

The loan will not be referred to an underwriter, and beyond any issues from the survey (barring any massive issues on the searches too), it is already approved. Hopefully, that means now we just need to wait and hear what the surveyor values it at, and within a few more days, the offer letter should be in our hands.

Thanks all for the advice - this forum is proving to be very useful indeed! :beer: