remortgage undervalues property

Brock_and_Roll

Although 6.99% sounds pretty horrendous at the moment, it is by historical standards pretty average (and from a financial planning perspective going forward one should make sure you could at least survive if rates hit previous highs over the 25 year term of a mortgage).

If you bear in mind that even if you were successful in remortgaging, the fact that the LTV is very high would limit the offers available and by the time you factor in the various upfront fees that seem to be standard these days, she might not be much better off at all.

As previously recommended, she should post her details on Dealing with Debts boards.

"Gifted deposits" - if there was one indicator that there was a property price bubble, this was it! Spawn of the devil!

Brallaqueen

shapeshifter42 wrote: »

We did check the local market prior to getting the first valuation, and that first valuation was from a reputable local agent.

No improvements to flat as was already a new build.

So where does the £110K come from, in the recession, on a no-longer-new build that hasn't had any improvements made to it?

beecher2

shapeshifter42 wrote: »

I think she said lender would only accept a valuation from their chosen estate agent. l

It'll be from their chosen valuer, not estate agent so your plan isn't goign to work.

Type in the details here http://www.nationwide.co.uk/hpi/
and I'd be amazed if it old you the flat was worth anywhere near what you think it is.

shapeshifter42

Well according to that site, the 25% share in a detached house in Cheshire I paid £50K for in mid 2007 is now only worth £43K

I've just sold it for £49K. Just waiting for them to sign the paperwork.....

So I'm not sure it holds true for low value properties, and at the end of the day, it's worth what people are willing to pay, and the first EA was confident someone would pay up to £110K.

shapeshifter42

beecher2 wrote: »

It'll be from their chosen valuer, not estate agent so your plan isn't goign to work..

My girlfriend was told the name of the estate agent who valued it and we have one in our local high street. It's cheeky, but I think it's worth a go to get them to value it posing as sellers

ILW

shapeshifter42 wrote: »

Well according to that site, the 25% share in a detached house in Cheshire I paid £50K for in mid 2007 is now only worth £43K

I've just sold it for £49K. Just waiting for them to sign the paperwork.....

So I'm not sure it holds true for low value properties, and at the end of the day, it's worth what people are willing to pay, and the first EA was confident someone would pay up to £110K.

It may be only worth what someone is prepared to lend on it.
Most new build drop at least 10% on completion (assuming a static market)
If the developer gifted a 25% deposit, would this not make the original purchase price around £65k?

shapeshifter42

ILW wrote: »

If the developer gifted a 25% deposit, would this not make the original purchase price around £65k?

Correct, give or take. So therefore a 75% LTV mortgage (although it got complicated to exlain this to the lender, apparently)

But based on asking prices of simlar flats nearby and our independent valuation, we were sure the place would be valued at £110K which would mean an £82K mortgage i.e. still a 75% LTV.

ILW

shapeshifter42 wrote: »

Correct, give or take. So therefore a 75% LTV mortgage (although it got complicated to exlain this to the lender, apparently)

But based on asking prices of simlar flats nearby and our independent valuation, we were sure the place would be valued at £110K which would mean an £82K mortgage i.e. still a 75% LTV.

I cannot see that any properties have risen in value by over 65% since 2008, unless something very special has happened in the area.

beecher2

shapeshifter42 wrote: »

Correct, give or take. So therefore a 75% LTV mortgage (although it got complicated to exlain this to the lender, apparently)

But based on asking prices of simlar flats nearby and our independent valuation, we were sure the place would be valued at £110K which would mean an £82K mortgage i.e. still a 75% LTV.

I'm completely confused. Doesn't this mean she would still get a 75% LTV mortgage? Is the issue that she wants to add to the mortgage in order to consolidate her debt, which isn't what you originally posted. Sorry if I've got the wrong end of the stick - I may just be reading this all wrong.

beecher2

ILW wrote: »

I cannot see that any properties have risen in value by over 65% since 2008, unless something very special has happened in the area.

28% I think, but I agree that it is very unlikely and pretty much impossible considering it is a new build. The OP does seem to have options so rather than being 'devastated' they maybe need to face reality.