Remortgage valuation questions

illmonkey

We took out a £138k mortgage, on the property valued at £147k. Actually got it for £140k.

I understand there will be a charge for cancelling the mortgage, but in the long run, i'd be saving money by doing it this way. I have loads of excel spreadsheets with all of the workings out on them! it just comes down to what mortgage lenders say.

Estate agents will overprice, but by 25k? i think not!

I went through a "call" with Northern Rock last night, they can lend me £109k! on a standerd fixed mortgage. Im now seeing if they will lend more through a "together" which allows up to 125% of the value. So even if it is well undervalued it will still be covered. Its just down to our salary and there decision now.

illmonkey

This is getting annoying.

Spoken to 4 or 5 top mortgage companys, and were getting no where. Most i've been offered is £137k. Which is what we were offered this time last year. Most are offering £117ish, makes me wonder how we got one in the first place!

Im going to chat to my broker today, see if he can do any better. I know these places need to protect them selfs etc, but i'm sure if they looked at our outgoings they could see by accepting us we'd be saving hundreds a month! making it much easier to pay the mortgage! Grrrrr!

MarkyMarkD

So, illmonkey, run that by me again.

You borrowed £138k on a property with a (obviously very dodgy) valuation of £147k which you only paid £140k for.

You now owe £140k - £2k more than you borrowed - either because you had fees or higher loan charges added to the loan or because you are in arrears.

You now imagine it's worth £175k - £35k more than you paid for it, presumably not very long ago. And you're surprised that Halifax only think it's worth £150k?

The additional costs of a Northern Rock Together mortgage are not as small as you think.

The up-front fees are high; the interest rate is higher than a normal mortgage; the early repayment fees are high because you want to exit before the exit fees expire.

I'm not sure that I can see how, by paying a lot extra on all of your mortgage, you are going to save enough money on the £25k part of it to make this whole transaction worthwhile.

This is particularly true if Halifax WILL lend you the £10k you have mentioned. Why not take their £10k and live with the other £15k in debt which you will be able to afford to pay down more quickly than originally scheduled, due to the reduced payments compared to paying off £25k?

illmonkey

The original mortgage was £138k, adding in fees and a payment holday has made it £140k.

Halifax's valuation is way under, considering there are smaller flats with no parking let alone a garage selling for £160k, also they are converted and above a shop. The 2 bed flat behind us has just sold for £200k, i dont think a (box) room is worth £50k.

I understand there are charges from taking on a new mortgage, all we're trying to do is limit our monthly spending. We're not taking out the 100% of the property's value, so will hopefully have some money left over to cover the fee's etc. At the end of this, i wouldn't mind if we came out of it at nothing. IE, no cash but no debt.

Halifax won't lend us the money as apparently we couldn't afford it, but at the same time, the £10k we could borrow costs £78 or similar, while £10k of the debt is costing £200 a month. I understand the need to protect them selfs though.