Remortgage Valuation comes lower than expected: HELP

coldasfire

I wanted to remortgage my existing property as I am currently on a variable interest rate of 4.74% with Northern Rock. I thought that at the moment the interests are down so I should take as high time to remortgage. I don't want to take any equity out and just want to do a mortgage to have my interest rate freeze. I choose Skipton building society as they offered me 4.39% fixed for 2 years on 15% deposit which I translated as if my property value is 215000, I can get a mortgage of 183000 which is what is out standing at the moment. I was waiting for the valuation and had my valuation done to my house by an independent surveyor but to my shock the valuation results were less than what I was expecting for my house value. My house value as per valuation was £200000 instead of £215000 what I was expecting. I did a search in my area and found that a house similar to mine was sold in the area for £237000 this year in March and Zoopla is advertising my house for £212000. I also have a house for sale at the end of my street similar to mine been advertised on £249,950. Also, as per Mouse Price.com I have my property estimated at £239000. I am quite disappointed and concerned on how come they have valuated on such a low price. Is there any way I can challenge it please as because of this, the bank can only give me £170000 where as I need £182000. Please help as I dont know what to do in this situation. At the moment I am not in a position to put any thing from my pocket except 1 or 2K. I am also concerned that if the mortgage rate will go up than I won't be in a position to get the mortgage as the property price will fall due to low buyers.
Appreciate all replies from all of you as a part from this forum I don't have any where I can go and do any thing.

Malky

Its a sign of the times I'm afraid. What you think your house is worth and what its valued at are two separate things as you have found out. The house at £237K was similar or the same? Did it have something yours doesn't? Is the house at £249K still for sale? If it is, and by your figures, it sounds overpriced.

coldasfire

Many thanks for your reply. £237000 house was almost similar to my house. The only difference was the conservatory. However in my property I have an extra shed and also new grass garden as well as newly built Bathroom and downstairs toilet. This was not the same to the other. I understand the sign of the times but a difference of £37000 is 18.5% which is huge. Is there any thing which will help me securing a deal e.g Part and Part etc?

DVardysShadow

coldasfire wrote: »

I am also concerned that if the mortgage rate will go up than I won't be in a position to get the mortgage as the property price will fall due to low buyers.

That point is where you shoot yourself in the foot. You acknowledge that property values may fall if interest rates rise. That is exactly why your property is being down valued.

coldasfire

Is there any way that I can be able to get a remortgage with the present scenario. I don't think that there will be any other way for me to get a remortgage done otherwise . Does it happen often that your property is undermined by that much?

brit1234

Your going to have to overpay your mortgage to raise equity levels. However prices are set to continue falling this year and next. So you will need to overpay higher than the falls.

Thrugelmir

Do you have a repayment or interest only mortgage?

holly_hobby

The only thing you can do is challenge the valuation, and obtain recent comparibles on same/similar properties sold in your area.

Comparing prices for houses currently for sale are no good, as the asking price may not be realistic and/or what the property actually achieves on its sale.

My own property valuation (2 yrs ago) was less than expected, so I spoke to the lender & surveyor and challanged his valuation. I provided supporting documentary evidence of same properties sold in my area for the preceedig 6 month period - and I was lucky enough that my surveryor agreed to amend his valuation to the amount I had stated in my remortgage app.

I am not saying that this will certainly work out the same for you, but it is worth a try - if your app was through a broker get him/her involved in this.

Hope this helps

Holly

coldasfire

I have a interest only mortgage at the moment with current rate @ 4.74%. My provider is NRAM (Northern Rock Asset Management) which is a subsidery of Northern Rock. I asked them as well whether they can consider me for remortgage but unfortunately they are not taking any new customers at the moment

coldasfire

Thanks for your reply. I have provided my mortgage advisor about the proof of the property value and ask him if he can appeal on my behalf. He will do it on Monday . Will keep posted. Do you think there are any other lendors available which can consider a remortgage on lower than 5% on 90% LTV?

Thrugelmir

As you are on an interest only mortgage. Then you are totally exposed to the downward pressure being exerted on house prices in many areas.

You need to start making regular capital payments to your mortgage account to reduce the balance owed.

If its a struggle now with low interest rates. Pay a visit to the debt free wannabe board for advice and suggestions on how to cut back on your expenditure and reduce your monthly outgoings.