How realistic are mortgage lenders' house valuations these days?

feesh

We need to remortgage soonish - well, within a few months, to protect us from any interest rate rises (currently on an SVR).

We're hovering around the 75% equity mark and obviously at this level, a few £££££ in the valuation could make all the difference in terms of how good a deal we get offered.

Obviously we can make overpayments (although we're with Bank of Ireland and they're not very flexible on this front), which we will be doing soon, but I just wanted to get an idea of how realistic the market was valuing houses at the moment?

E.g. if we think our house would *realistically* sell for more than £220k (based on a recent sale of an identical house 3 doors down and having kept a realistic eye on the market over recent years), is it more likely to get valued at something like £210k by mortgage lenders in the current market?

VIGILANT22

If you're on the SVR you should have no restrictions on overpayments...
Surveyors are appointed by the lender and they're assessing the risk on their behalf
They are more likely to value down than up...err on the side of caution

somethingcorporate

We've just been through a valuation with the bank you are currently with.

The previous week the house next door (identical) had sold for £220k, we told the valuer this, he asked for the estate agent to confirm the details and a few days later we got the valuation through at £215k. So I think as long as you can provide a bit of support of your price suggestion (£210k based on nearby house selling recently) and can get an EA (or details on the land registry) to confirm then (fingers crossed) you should be ok.

Good luck.

happybroker

Valuations vary wildly from surveyor to surveyor, for instance I am dealing with a case at the moment where 2 valuations have been carried out by seperate "professionals" and differ by over 20% (!!) and the highest is nearly 30% lower than property being marketed locally. So, you can see it is rather hit and miss at the moment I'm afraid.

Be aware that certain lenders (Abbey & A&L for instance) won't allow you to appeal a valuation if it was paid for by them as part of a fee free remortgage.

feesh

Thanks all. Vigilant22 we do most certainly have restrictions on the overpayments we can make, one of the reasons I am keen to ditch Bank of Ireland. They are very inflexible in this respect, and charge you £60 for the privilege of shortening your mortgage term, which I think is a bloody cheek.

And they have only recently reduced the minimum amount of a lump sum overpayment - it used to be £2k but now they have kindly reduced it to £500!

ANYWAY thanks for the helpful info - it looks like there is just no predicting what valuations we will get (although this recent sale will help a lot) so my focus will be on making as many overpayments as possible and getting us well within that 75% equity comfort zone.

VIGILANT22

A SVR normally does not restrict payments. I have just checked the BOI website and it states if on svr no charge for overpayments. Does the £500.00 min payment apply to the svr or those in the "promotional period"?

http://www.bankofirelandmortgages.co.uk/existingCustomers/lookingToManageMyMortgage/MakingLumpSumOverpayments.aspx

If you are outside of a promotional period and no Early Repayment Charges apply, there is no charge for making lump sum overpayments. If you're in a promotional period, many of our mortgages allow you to repay up to 10% of your mortgage balance each financial year without incurring any Early Repayment or administration charges. This is calculated each year based on the outstanding mortgage balance from 31st March in the previous year and the minimum payment is just £500.


If you have a flexible mortgage the process for making lump sum overpayments is slightly different

feesh

Thanks Vigilant. You were right - I rang BofI and they explained that their £60 charge would not apply and we were free to make overpayments via a regular standing order, which I have now set up for £200 pcm.

I played with the spreadsheets last night and we have a lot of work to do to get comfortably in the 75% zone (allowing for pessimistic valuations from mortgage companies) so we will have to tighten our belts and throw as much at it as we can over the coming weeks and months on top of the £200pcm we are already paying.

VIGILANT22

I'm glad it's worked out for you....It's amazing.... when you decide to "tighten your belt"....you suddenly realise do we really need theses takeaways, frappucinos on the way to work, magazines on the train....but then again what is life without a "guilty pleasure"....

feesh

VIGILANT22 wrote: »

I'm glad it's worked out for you....It's amazing.... when you decide to "tighten your belt"....you suddenly realise do we really need theses takeaways, frappucinos on the way to work, magazines on the train....but then again what is life without a "guilty pleasure"....

Try telling my husband that, it's him with the expensive habits (taxis, takeaways, crappy old cars :mad:) Martin should run a training course for uncontrollable husbands!:rotfl: