How does a valuer value the property?

lobbyludd

FTB - sorry! Hi, I am buying our home from my former husband. The deposit for the mortgage is the equity currently in the house and the mortgage I'd need works out at just under 75% LTV. This is based on the estate agents estimate of the sale price (not the asking price which was 15K higher) last year.

If the house is valued at less, then my deposit decreases at a greater rate than the house price because I have to release husband from a fixed mortgage amount, so all the decrease hits the deposit.

However, recent sales in my area (if you look on zoopla etc) have averaged at 15K less than the price we have agreed on. Those where I can still see the details and on the same road, were slightly smaller and/or were ex rental properties that have had to be gutted, or are just being farmed out to students again.

Been looking at a few threads here with values coming in lower than the agreed price, and was wondering what the valuer takes into account, and also if the value of the house came in from the mortgage company at a lower price would that invalidate/effect the "deal" I was applying for based on the LTV, or would they just be looking to see if the value of the house was enough to recoup the loan on a quick sale if I ran away to the bahamas?

House was valued at 170-175 a year ago (estate agents, with a proposed asking price of 185) I need a mortgage of 127K to release him. H & I had both agreed it's worth 170K in the divorce financials, based on that but the divorce has been rumbling on for a year so not sure what has happened to house prices in the interim. The "average" price for a 3 bed semi in my area is fluctuating between 177 and 155K per quarter as there are so few each sale makes a big impact on the price (its mostly terraced housing).

I can scrabble together enough money to keep the LTV at under 75% if the property is valued at 160K but no lower.

Is it worth paying for a valuation privately?

kingstreet

Firstly, estate agent valuations are irrelevant. They will be based on what the estate agent thinks you want to hear. If you tell them why you want the valuation, they would normally tell you to p*** off, as they are interested only in putting property on the market.

You have two choices in getting a "proper" valuation. Instruct a qualified chartered surveyor to carry out a valuation inspection for you, or pay for a valuation from HomeTrack, the company which supplies "desktop" services to many mortgage lenders. The former would be more likely to provide an accurate figure.

Zoopla = less effective than chocolate teapot!

If you do choose the surveyor route, it may be worth using a surveyor on the E-Surv panel, or one likely to be instructed by your chosen mortgage lender, to ensure you don't get a variation in figures between the two surveyors.

If there's anything I haven't answered, please feel free to ask again. Forgive the bluntness, but there was rather a lot of verbiage to get through!

paulus_the_woodland_gnome

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lobbyludd

kingstreet wrote: »

If there's anything I haven't answered, please feel free to ask again. Forgive the bluntness, but there was rather a lot of verbiage to get through!

thank you! noted and understood ;-p

sooo...... if the valuation does come in under the value I think the house is worth, and therefore my deposit drops, what does that mean in terms of the mortgage I'm applying for? will that be a straight knock back if I can't make up the deposit to get the 75% LTV?

lobbyludd

Ok - hometrack's predicted value is 1K more than we have settled on (with 10% either way as a caveat). so I'm just going to bite the bullet and hope!

Thrugelmir

lobbyludd wrote: »

.

Is it worth paying for a valuation privately?

No, as it will be just a number on a piece of paper and have no value.

kingstreet

lobbyludd wrote: »

thank you! noted and understood ;-p

sooo...... if the valuation does come in under the value I think the house is worth, and therefore my deposit drops, what does that mean in terms of the mortgage I'm applying for? will that be a straight knock back if I can't make up the deposit to get the 75% LTV?

Unlikely. What is more likely is that you'll be offered a less attractive product because you then fall into the 80% bracket rather than the earlier one at 75%. Have a look at Yorkshire Building Society products for an idea of what I mean.

http://www.ybs.co.uk/mortgages/current_products/index.html?customerType=&mortgageType=fixed#newR

FOR EXAMPLE ONLY - You can apply for the 5 year fixed at 3.49% for loans under 75% of the value of the property. If you then find the property value is lower, you'd fall into the next banding of products upto 85% loan to value which would see the rate rise to 4.24%.

It sounds like you're moving in the right direction so I think you'll be fine. Let us know how you get on, or if there's anything else you need clarifying.