Valuations - are they a formality?

papermoney

Going from another post on another thread, someone has said that a valuation is to confirm the property if worth the value of the mortgage and that the mortgage is going tot be accepted as long as the valuation comes in at the right price - is this everyone elses experience?

luckyfool

Valuations are not a formality. It might be that an application has been underwritten and accepted subject to the valuation ... i.e. everything else is ok and as long as the valuation checks out it will be approved. However I would not describe them as a "formality", as that would imply that they are just ticking a box and will always come back ok. On remortgages especially valuations often come back substantially short of where you expect in terms of the valuation figure in the current climate.

SandC

I think it's only really a formality if you have a low LTV - which in my personal experience is situations like myself where I bought 15 years ago and am on repayment and have never borrowed any more money on my mortgage.

Leon_W

Still not a formality SandC !

If your property has obvious signs of subsidence then no mortgage company would touch it with a bargepole no matter what the LTV.

Regards

AndersLimpar_2

The surveyor is there to ensure the lender they are making a 'sound' investment, if the EA has overpriced its actual value then the surveyor will put on the report its worthless (in his or her opinion). The lender takes the surveyors valuation as red, not the estate agents.

2 rletives of mine and myself have recently had surveys done, each time they have valued it at exactly the agreed selling price.

firstaspect

It's not a formality, it's just part of the process which usually is ok but not always.

papermoney

Thanks everyone - I realise 'formality' may be the wrong choice of wording. I have applied for a mortgage through Nationwide and the valuation is being done tomorrow - so I wasn't sure if this meant all checks had been done and it now just relies on the valuation coming back ok (which im not too worriedabout, even though we are buying a repo).

caeler

Nationwide did my valuation on 11 November and I got confirmation today that it is 'satisfactory'. Still no offer though!! Fingers crossed for the end of the week!

I was told they don't authorise the valuation until you pass all the other checks (credit check, etc).

dashfield

We're just in the process of trying to remortgage at the moment and I need to understand more about valuations.

We are just on the 80% LTV and £1-2k in the wrong direction could take us over that 80%, which means we couldn't get the deal we want.

So we need to get the highest valuation possible. So how much do they take into account when valuing the house?

For example, I have a few DIY jobs to complete, like putting doors on the warchdrobe, tiling the bathroom floor etc. Generally our house is in a good condition, but should i hold off applying for a new mortgage until i've completed all those DIY jobs done? Will it make a big difference? Should i treat it like it was an estate agent coming round to value it to put it on the market?

I was also wondering how much they take into account the prices of the houses around you. Our neighbour's house is for sale and they have just knocked £10k off the asking price in the last few days. I'm worried this is going to have a really negative effect on our valuation.

beecher2

I'd knock a bit more off next door's asking price to give you an idea of what valuation you're likely to get, as you're very unlikely to get one which is on the generous side.

Do you have to remortgage? What does your deal revert to, and what offers has your present lender offered? Have you asked them how much they think your house is worth?

dashfield

beecher2 wrote: »

I'd knock a bit more off next door's asking price to give you an idea of what valuation you're likely to get, as you're very unlikely to get one which is on the generous side.

Do you have to remortgage? What does your deal revert to, and what offers has your present lender offered? Have you asked them how much they think your house is worth?

We would like to remortgage because it will save us alot every month. We've been on 5.99% fixed for the last 5 years with Northern Rock, but that comes to an end on the 1st Jan 2011. The SVR they will move us on to is 4.79%, which will save us about £96 every month.

But we wanted to switch lenders and the best deal for us at the moment seems to be 3.49%, which will save us £185 a month compared to what we currently pay. But that is only if we get no higher than 80% LTV.

Obviously we're keen to remortgage ASAP because every month we wait, we are spending more than we need to. As our finances are very tight at the moment, the extra money will really make a big difference for us.