what is an index valuation?

wizard3891

was in my bank branch today closing one of my old cc accounts.

they did a print out of all of my accounts with them which includes my current account and mortgage etc

Under the mortgage it says the outstanding amount etc and also and index valuation and the original valuation.

The initial value was £155000 before we moved in last august

Under that it said an index valuation of just over £165000.

What does this mean?

HelpWhereIcan

This will depend on who the lender is, but I would suspect that it is mainly a marketing/credit decision making tool.

They may have just applied a rate of growth (based on the house price index) to the original purchase price to guestimate the property's current value. This may help them when looking at applications for credit from you and or help them identify opportunities to sell you a secured loan etc.

It is also a sign of changing times. Many lenders are currently doing 'desktop' or electronic valuations when dealing with low loan to value remortgages. There are also reports that the Halifax has been testing their system for purchases (ie comparing it's results to the ones they are getting back from surveyors) and that they may start to officially trial desktop valuations on purchases later this year to bring the time to offer down.

Best way to find out though is to ask them

Hope this helps

Robert_Sterling

I think that the "Index Valuation" could be the current house value based on ta house price index such at The Haliax and The Nationwide provide each month.
Anoth index which is used is the cost of rebuilding a house rather than the value of the house and this is used for insurance purposes. This valuation is less than the value of the house as you do not insure the value of the land on which a house is built.