Remortgage - Who decides how much a house is worth?

gavcradd

Simple question really, for a remortgage application, who decides how much a house is worth?

My wife and i bought our house in 2006 for £125,000 on a 100% mortgage with Standard Life, 3 year fixed at 5.3%. When the fix came to an end in 2009, I had the house re-valued (simply by pretending to want to sell it with an estate agent) and, lo and behold, it was still worth £125,000. With this figure, compared to how much we still owed, I was unable to get an sort of other fix and so we've stayed on Standard Life's variable rate, which conveniently enough, is currently 5.3%.

However, I'm now getting nervous about the potential for future interest rate rises. Not nervous that I won't be able to pay (my salary is £40k, my wife's part time salary is £21k) but just nervous at paying so much if I can help it.

Since 2009, we've had a conservatory added so I hope the "worth" of the house may have risen slightly, but I'm not sure by how much. We curently owe £116,000 on the house so it'd need to be "worth" £130,000 ish to access some of the 90% deals around at the moment.

My question is therefore - who decides if it is worth £130,000? Am i best going through a broker, or just applying for the best 90% re-mortgage I see and crossing my fingers?

blueberrypie

The lender will decide the value of the house. Sometimes this is done by computer, simply by comparing the selling prices (not asking prices) of similar properties in the area which have sold recently, and sometimes they will send someone out to value it.

Estate agents' valuations are typically higher than lenders' valuations. Conservatories don't generally add much to the selling-price of a house. It's possible that your valuation in 2009 was accurate and that your property has gained another £5k in the meantime, but tbh, I wouldn't rely on it. Do you have any savings you could use to reduce your mortgage balance?

beecher2

Overpay as much as you can to get your Loan to Value down - go onto the Debt Free Wannabee forums for help in budgeting and throwing as much money as possible into your mortgage.

Have a look at what similar properties have sold for recently.