remortgaging and releasing equity question

dprovan

Hi

I have just read another thread where a poster has commented that if you remortgage with the same lender as your previous deal that they will not do a credit check. Is that correct?

I took out a mortgage of £245,000 with alliance and leicester in Feb 2007. I put down a deposit of 16% £45,000. The house was valued later in 2007 at £390,000 (I know!!! prices went crazy in N Ireland) I believe a more reasonable valuation now would be £300-320,000.

I am looking to remortgage with santander (same bank) in August time. Current mortgage balance is £220,000 and I would like to borrow £245,000. Our combined income is £61k.

Are the bank likely to do credit scoring etc and are these figures likely to be favourable to them.

thanks

beecher2

You will be credit checked if you're asking for additional borrowing.

I'd be prepared for a shock regarding valuation figures

http://www.nationwide.co.uk/hpi/

[FONT=Verdana, Arial, Helvetica, sans-serif]Results:-
A property located in Northern Ireland which was valued at £290000 in Q1 of 2007, would be worth approximately £170619 in Q1 of 2011. [/FONT]

and

[FONT=Verdana, Arial, Helvetica, sans-serif]Results:-
A property located in Northern Ireland which was valued at £390000 in Q4 of 2007, would be worth approximately £208019 in Q1 of 2011. [/FONT][FONT=Verdana, Arial, Helvetica, sans-serif]This is equivalent to a change of -46.66%.[/FONT]

kingstreet

dprovan wrote: »

Hi

I have just read another thread where a poster has commented that if you remortgage with the same lender as your previous deal that they will not do a credit check. Is that correct?

I took out a mortgage of £245,000 with alliance and leicester in Feb 2007. I put down a deposit of 16% £45,000. The house was valued later in 2007 at £390,000 (I know!!! prices went crazy in N Ireland) I believe a more reasonable valuation now would be £300-320,000.

I am looking to remortgage with santander (same bank) in August time. Current mortgage balance is £220,000 and I would like to borrow £245,000. Our combined income is £61k.

Are the bank likely to do credit scoring etc and are these figures likely to be favourable to them.

thanks

Changing one mortgage deal to another with the same lender isn't a remortgage, it's a product transfer. If you need more money, it's a product transfer with further borrowing.

As an A&L borrower you would ordinarily be able to return to them to complete this transaction and further status checks would be carried out because of the additional borrowing.

As Santander has taken over, this may actually be a change of lender and therefore a remortgage as a change of mortgage deed will be required. A pound for pound change may not have resulted in new status checks, but with the increase in borrowing you mention, I'm pretty sure they will be.

Hopefully someone who has changed from A&L to Santander might post their experience for you.

beecher - those figures are frightening! :eek:

dprovan

Beecher

thanks for the feedback...

I am prepared for a shock re value. Ultimately it is only worth what someone is prepared to pay.

Whilst the nationwide statistics provide one level of information to consider they are just that... It is looking at statistics for a country..... it does not take into account location, type of house, individual selling points etc etc...

To illustrate how limited such a tool is, what I failed to mention was that the purchase price of £290,000 was the price that was agreed in Q1 of 2006. The sale of our previous house fell through twice and the builder held the house for us.... Put that figure into the calculator and my house is now worth:

A property located in Northern Ireland which was valued at £290000 in Q1 of 2006, would be worth approximately £268902 in Q1 of 2011.

How are santander likely to value the property, will they send someone to do this or are they likely to use something as random as the nationwides number cruncher

beecher2

dprovan wrote: »

Beecher

A property located in Northern Ireland which was valued at £290000 in Q1 of 2006, would be worth approximately £268902 in Q1 of 2011.

Which is above 90% LTV so still a potential problem. Maybe you could phone up Santander and ask them if they have a desktop valuation they can give you over the phone?

geoffky

try down 50% for northern Ireland....madness was rampant...

noodle

Blimey, never seen that Nationwide calculator before. I don't like it... it tells me I've barely broken even since 2004! Mind you, it comes up with almost exactly the same number that HSBC's valuation computer does.

Of course, *I* know that my property is special because it has character (aka everything is old and wonky) and has been invested in (aka loads of shonky DIY) so it's worth loads more.

And hey, even if it is only worth what I paid for it... living here for seven years counts for something, I think.