Remortgage valuation questions

illmonkey

I am in a bit of a pickle here. Basically, i have a flat worth £175k (3 independent estate agents have said it could sell for this). Current mortgage is £140k, and we have £25k of debt.

I have looked into a furthur advance from our mortgage company, halifax, and we were refused as they didnt value our house high enough. They came in at £150k. I tried to get them to up it, even a small amount, and they said no.

So we tried a few more avenues. Nothing seems worth while apart from borrowing the money on a mortgage rate and term.

I spoke to northern rock, and they have said we could (i know, checks will need to be done) potentially borrow £200k from them. Which is way over what we need.

Now, my fear is that our property would need to be valued at 175k or higher to get what money we need out of it. Im concerned that their valuers will come in with a stupidly low valuation like Halifax did. From what i gather, halifax's valuation was one that they could shift it for quickly to cover the mortgage if it got repossessed.

Also, the guy at Northern rock, said that they could do 125% lending, but i cant see that info on the website.

I really dont want to spend £530! on a valuation for it to come back really low so we cant swap to them at all.

Sibelius

I have known people to prove the true value of their property by showing examples of equivalent recently sold properties to the mortgage company. I have a friendly local estate agent that will do this. Maybe this could help you.

illmonkey

Sibelius wrote:

I have known people to prove the true value of their property by showing examples of equivalent recently sold properties to the mortgage company. I have a friendly local estate agent that will do this. Maybe this could help you.

With halifax, i could of done that. But, there is no property really like ours.

The lady went to point out others she compared ours to. Basically, there were all 1 bed flats, but ours has off street parking and a garage. And the one she pointed out was smaller and more money.

She also wanted sales from upto 3 months ago. I could also only find 2 bed flats like ours selling for over £200k. and it wasnt enough apparently.

LisaT186

Comparisons of similar properties that have sold in the last few months are the only way you will get a valuation changed. The reason they value to get rid of it quickly is because the only time they are interested in the value is if it is repossessed!

Northern Rock do have a product that allows you to borrow more than 100% of the purchase price of the property, 95% as a mortgage and the rest as an unsecured loan. I would urge you to talk this solution through with a mortgage broker though to see what effect it will have potentially putting your debts on a longer term. If it is the right route for you then you could get £187,500 on a valuation of £150,000 if the valuer did down value it.

illmonkey

LisaT186 wrote:

Comparisons of similar properties that have sold in the last few months are the only way you will get a valuation changed. The reason they value to get rid of it quickly is because the only time they are interested in the value is if it is repossessed!

Northern Rock do have a product that allows you to borrow more than 100% of the purchase price of the property, 95% as a mortgage and the rest as an unsecured loan. I would urge you to talk this solution through with a mortgage broker though to see what effect it will have potentially putting your debts on a longer term. If it is the right route for you then you could get £187,500 on a valuation of £150,000 if the valuer did down value it.

Thank you. I have talked to my broker who has warned me of the problems it could lead to. We only plan to live in the property for an other 2 years max. The money we save by getting a loan like this would be alot.

The debt will still be there, i understand that, but making living life that bit easier for a year would be a great boost for us. I dont care if we only break even at the end of it all, its just a way to make life easier till then. At which point we could just start again on the property ladder, with no debt.

LisaT186

Sounds like you have thought it all through. Good Luck and see what your broker can do with Northern Rock. Birmingham Midshires also do a similar product and Alliance and Leicester are launching one soon as well. i'm sure he'll get the right one for you.

regularsaver1

I'm afraid that sometimes Estate Agents overprice, based on receiving offers under the asking price

MarkyMarkD

I would be very careful with redemption penalties especially as you state that you are intending to sell the house within two years. Most products of the type being discussed will have penalties lasting at least this long which would render them unacceptably expensive as a means of borrowing.

By the way, how have you managed to borrow £140k in the first place on a house which Halifax only value (now) at £150k? What did they value it at in the first place?

regularsaver1

They do up to 97% loan to value. - but there would of been a higher lending charge.

what did you purchase property for? and what did they value you it at originally?

MarkyMarkD

Yes, I realise that it wasn't purchased for £150k. It just seemed like a high proportion of the original value.

regularsaver1

thats what i thought