Mortgage - Transfer of Equity

NJS1982

We bought a house as a trio 3.5 years ago, for £225k. Obviously house values have dropped, but fortunately not as much for us as some areas. I bought one housemate out last year and recently my other half moved in and bought my other housemate out, with a house value of £209k. We decided on the £209k as the average from five local valuations.

We have a mortgage of around £183k with A&L (now part of Santander but still A&L). We applied for a 'transfer of equity' from them (as we did the previousyear when I bought the first housemate out) and they came back with a statement to say we need to pay them c.£6k as the house price is now £181k as per some search they used (info something or other?). Persoanlly this is a ridiculous value (I am not just saying that!) for where the house is etc. and going on other sales of similar houses locally.

Can anybody explain to me why A&L have done a search to value the house? Surely they are just assessing the risk of the proposed new mortgage customer (my other half, who earns twice what my old housemate earnt and has no debts or bad ratings etc.).

They said they are happy to arrange us having another accurate valuation, which obviously I shall have to pay for...It seems like a bit of a con to me, am I right? I sort of understand loan to value etc. but to go off and value the house innacurately using some random database seems odd...

kingstreet

A desktop valuation with a firm like HomeTrack would be common for such a situation. The A&L is merely trying to ensure its security and its lending keep pace with change. Some might say it's about time.

If you want something, you're going to have to pay for it, so the valuation appears to be your only option, as it would if you were remortgaging to them from another lender.

NJS1982

Thanks. I am just incredibly dubious when it comes to the 'new' A&L AKA Santander and them ripping us off. They are appaling when it comes to custmer service; all of this was initiated nearly two months ago, I call the other day and they tell me this over the phone, no letter or anything. Our payslips came back last week in a hand-written envelope with no letter...not impressed.
I think we may look at another lender...
I am just confused as to why they would check the value out (which is massively undervalued) when if we had not requested this transfer (to a better candidate as my other half earns double what my old housemate did and has no debts etc.) then they would be none the wiser. Surely if this is the standard practice, they should periodically do this with every house they have money against?!

kingstreet

NJS1982 wrote: »

Thanks. I am just incredibly dubious when it comes to the 'new' A&L AKA Santander and them ripping us off. They are appaling when it comes to custmer service; all of this was initiated nearly two months ago, I call the other day and they tell me this over the phone, no letter or anything. Our payslips came back last week in a hand-written envelope with no letter...not impressed.
I think we may look at another lender...
I am just confused as to why they would check the value out (which is massively undervalued) when if we had not requested this transfer (to a better candidate as my other half earns double what my old housemate did and has no debts etc.) then they would be none the wiser. Surely if this is the standard practice, they should periodically do this with every house they have money against?!

Any lender under new management may do things differently. A&L found itself taken over, so Santander might point out A&L should have been doing things more tightly before and it might still be independent?

I don't know the answer. What I can tell you is the only way this will be concluded to your satisfaction is for you to pay for a surveyor to confirm what you believe is correct - that the property is worth more than A&L's desktop valuation.

The other thing you've noticed is how existing customers get nothing like the service new customers get. The Nationwide's "introductory shag pile" advert was refreshingly close to the mark.

If you've got the equity (which it sounds like you haven't at the moment) you can of course look to move to another lender.

What was the basis of the valuations which gave you the £209k valuation last time out? Not an average of different estate agents? :eek:

NJS1982

The £209k value was based on the average of 5 valuations, one of which was a paid for non-estate agent valuation. This actually came back a little more, hence why I am aslightly perplexed by this £181k figure. I was wonderign if this was some random re-build figure or something?!

If I do an online valuation (I know they are not 100% accurate!) then even this has an average value of £215k.

Luckily we do have more equity we can put down and it seems like the logical thing to do, but we were saving this for an extension, which we can hold off for another year I suppose...just a little frutrating because as I say, my ex-housemate who is still on the mortgage could stay on it for another year (and possibly will now given this!) whilst we continue to pay the mortgage!! All seems very mad.

kingstreet

It does sound odd. You didn't fall into the trap of accepting an estate agent valuation as being gospel for your purpose, so you couldn't have done anything differently. Did you try giving A&L a copy of that valuation from last year?

If you do decide to pay for a valuation, let us know the outcome.

NJS1982

The update so far, two months later....

We have a valuation pencilled in for tomorrow afternoon, by E-Surv, being paid for by Santander.
So many long phone calls, hours worrying and months waiting and the ball is finally moving, thanks not to Santander or their complaints department but down to us and our persistent chasing.
We have also been promised a £50 cheque for the phone bills and 'our time', which is quite laughable considering what an hourly rate could be and how many hours we have spent with this issue, but it covers the phone bill if nothing else...will wait to see if that shows up or if it mysteriously disappears into the big black hole we have somewhere between their office and our door.

What really gripes me is that we actually got a contact in the Stage 2 Complaints department; she promised to call back, email back, but rarely did, and every time we called, we would be rudely told by unprofessional staff that she was 'in a meeting'. When we asked to speak with another Senior Manager, they were also in meetings. there were a couple of occasions when the person who took the call forgot to mute us so we heard them shouting across the office to see if said person was available, only to be told she was again, in a meeting. Totally and utterly unacceptable service. Whilst I appreciate that our elusive contact in the Complaints Team may have an exceptionally busy diary and be reliant on people in another team (the Transfer of Equity Team) for answers, keeping us updated would have been appreciated, especially when sincerely promising to call us back at set times only to fail repeatedly.

If we could move our mortgage and get the same deal with another organisation, we definitely would, but the deal simply cannot be beaten. Needless to say, I have closed my own long-standing current account with Santander now, in the process of closing my Santander Joint Account and need to cancel my two Santander credit cards (previously Abbey and Alliance and Leicester cards). Their loss is First Directs gain, for what it is worth.

I still have the Financial Ombudsmen's number to hand, just in case...

Thrugelmir

NJS1982 wrote: »

I still have the Financial Ombudsmen's number to hand, just in case...

You appear to be overlooking the fact that Santander can lend to who they want. There is no right to a mortgage nor a transfer of equity.

So the FSO can only rule on the service you were given. No aspect of commerciality will be factored in.

It would appear that you have a high LTV in any event. Which may prove a stumbling block in the short term.

NJS1982

The FSO would look at the service we have been given. Right, so the service is pretty poor to date, we win.

Thrugelmir

NJS1982 wrote: »

The FSO would look at the service we have been given. Right, so the service is pretty poor to date, we win.

Win what? There's no automatic entitlement right to a mortgage.

The property market is facing some challenging headwinds. So lenders may be pre-empting the market in given locations for what ever reason they choose.