remortgage undervalues property

ILW

beecher2 wrote: »

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.

Based the 65% figure on the fact that the developer gifted a 25% deposit. This meant she actually bought the place for £65k.

beecher2

ILW wrote: »

Based the 65% figure on the fact that the developer gifted a 25% deposit. This meant she actually bought the place for £65k.

Ah I see - is that the value which would've been registered? If so, then I have to wonder about the possibility that the OP is trolling.

shapeshifter42

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.

No, the property was "purchased" for about £86K with a 25% gifted deposit, so the mortgage was only about £65K or 75% of the property's value.

If the property was valued by a new lender at £110K as it has been independently, my girlfriend could remortgage at about £82K which is just under 75% and enough to clear the debts AND get a rate of half of what she is paying now.

So yes, we are talking about remortgaging to clear the debts, but the 6.99% rate is reason enough to want to remortgage IMHO, so I didn't want to confuse the issue in my original post.

Thanks for everyone's input so far

shapeshifter42

beecher2 wrote: »

Ah I see - is that the value which would've been registered? If so, then I have to wonder about the possibility that the OP is trolling.

Troll? :-P

Nah, was registered at 86-ish. Confirmed on Zoopla last night. But our Neighbours properties are registered at anything between 66 and 140 even though they were all bought within the space of a year for reasons I explained in my first or second post.

beecher2

shapeshifter42 wrote: »

No, the property was "purchased" for about £86K with a 25% gifted deposit, so the mortgage was only about £65K or 75% of the property's value.

If the property was valued by a new lender at £110K as it has been independently, my girlfriend could remortgage at about £82K which is just under 75% and enough to clear the debts AND get a rate of half of what she is paying now.

So yes, we are talking about remortgaging to clear the debts, but the 6.99% rate is reason enough to want to remortgage IMHO, so I didn't want to confuse the issue in my original post.

Thanks for everyone's input so far

So she can still remortgage to lower the 6.99% rate, as her LTV is still below 75%. It just means she can't consolidate her debts, which is rarely recommended anyway. Just remember you'll likely have an ERC to pay.

apologies for the troll dig - but I do think your gf needs a dose of reality and a visit to the Debt Free Wanabee forums.

ILW

shapeshifter42 wrote: »

Troll? :-P

Nah, was registered at 86-ish. Confirmed on Zoopla last night. But our Neighbours properties are registered at anything between 66 and 140 even though they were all bought within the space of a year for reasons I explained in my first or second post.

Think the trouble is that gifted deposits were always a bit of a scam (basically overvalue by 25% and then knock it off the paid price) Banks and building societies have now got wise to this and are basing there valuations on different criteria. £88k may be pretty good.

ixwood

Gifted deposists were just a scam to get unrelistically high figures in to the Land Registry, with the intention that future buyers would benchmark prices from there and pay over the odds.

brit1234

As said above, the true value is what you paid for it minus the gift deposit, minus a little for ware and tear, minus a little for price correction down. So likely about £75k

Gift deposit money is a fraud. It is a way to pervert land registry figures upwards which are then used for valuations on other properties pushing them up higher as well. Banks phased out lending to them so now builders do homebuy and shared ownership which inflate land regustry figures the same way.

Zoopla over values things, don't trust it. Better using property bee on certain websites

http://www.property-bee.com/

Thrugelmir

shapeshifter42 wrote: »

So yes, we are talking about remortgaging to clear the debts, but the 6.99% rate is reason enough to want to remortgage IMHO, so I didn't want to confuse the issue in my original post.

Remortgaging to clear other debt while positive for you. Is not the type of lending that the majority of lenders are looking for. So as others have suggested wake up to reality and tackle the debt issue head on. There's no easy answers but the goal once achieved is rewarding.

dazza_mfc

Brallaqueen wrote: »

Things are not the same as they used to be and properties are not all worth the same they used to be. The valuation came back as what she paid for it (more, even) and in this climate this is a good valuation!

Has your girlfriend looked at sold prices for around her area (I understand the block itself has not sold on)?

Has she made any improvement to this new build flat that would make it worth more than she bought it for?

Can she get more free valuations from other estate agents? If 5 valuations ALL say £110k, the she might be on to something.

An estate agents valuaion ( No matter if there is 100 of them at £110K ) will not make any difference. A surveyor will not use an Estate Agents appraisal as acceptable sales evidence . However, you are correct in reference to sales comparables in the local area.