Quick remortgage question

Perelandra

Just a quick question, I think-

2 years ago I bought a house for £220k. The house needed major reburbishment (new bathroom, kitchen, rewiring, new central heating system, replastering etc) at a total cost of about £30k. Similar (identical sized) houses have recently (in the last 2 - 6 months) sold at the 265k mark in my street.

I will be wanting to remortgage soon. For LTV purposes, would it be reasonable to value the house at £250k rather than the 220k I spent on it, representing the original purchase value + the amount I've spent on moving it out of the 1950s and into the 21st century?

Thanks!

Perry

opinions4u

Have they sold for £265k or were they marketed at that price?

If sold, then why not suggest a value to match?

Perelandra

Thanks for the response,

Yes, those are actual sales prices (marketed for £275k to £285k).

I don't actually need a valuaion as high as the £265k to pass the LTV requirements for the mortgage- £250k is enough. I'm just trying to check that the way I see the situation isn't just a fanciful dream!

i.e. it seems reasonable to me that the value of the house is either "the price that similar houses sell for", or alternatively "the price I paid, plus the amount I've spent on required refurbishment". I have a niggling doubt that the £220k I originally paid for the property might bring down the valuation

(I think I got the house at a good price, given that it's now all lovely inside, and I've effectively paid £250k for a house where comparables have sold for £265k. That £15k 'discount' is unproven, of course, but I don't need to rely on it for the remortgage... hope that makes sense!).

Noviceinvestor

You could ask 3 local estate agents to come round and give you a valuation, then assume the valuation to be the average of the three quotes. Agents will have knowledge of your local market, what buyers are looking for, and what they are prepared to pay

kingstreet

I will be wanting to remortgage soon

Are you remortgaging, or are you planning to ask your current lender for a new deal?

Perelandra

At the moment I'm looking at remortgaging with another lender- on flexible mortgages (i.e. those I can overpay!), the best advertised rates of my current lender are someway off the rates I can see advertised by other lenders.

There are costs involved in this I know.

kingstreet

In which case, when you apply, the lender will send a surveyor to inspect the property. Point out the improvements you carried out since you've purchased the property.

He will look at the comparables - sales of similar properties in the area in recent months and decide if your estimated value matches them and is reasonable in the current market.

Many lenders offer such valuations free, so you may not have to commit to spending money to get an answer to your question.

Perelandra

OK, thank you. So it sounds like I have the basic principle right, and it's not just a "don't be silly, Perry, that's not how the world works" answer. The devil, though, will be in the detail as to whether the valuer agrees with me.

Thanks for your helps!

princessdon

I'm in the same position looking at a new remortage to a flexible one and the 3 lenders I am currently considering will pay all or most of the charges including Legal and valuation

Just worth a mention because the websites didn't have these incentives but when I rang for info they informed me and the very small print (not obvious) on the website states it.

magpiecottage

Before taking the plunge do go through the sums for the duration of any deal. How much will it cost you to the end of it if you move, including legal and survey fees, application fee, early repayment penalty (if you are being held to "Ransom" by your current lender), compared to sticking put over that period.

Remember, too that if you add any fees to the loan you will be paying interest on them until you eventually become mortgage free.