Getting property valued again

jimmyscot

Hi,

This may be a stupid question but i need someone that knows what they are talking about to tell me why!!!

I bought a house approx 4 years ago for 110% of the value 105% of that was put on a mortgage and 10% was paid. (needless to say this was when mortgages were given to anyone)

Anyway the original mortgage was a 3 year fix which has since ran out and i am now on the SVR. I have thought about getting another mortgage but i am still at 100% LTV therefore cannot.

Is it worth getting the house valued again as we have modernised the house so was hoping that if the valuation goes up then my LTV will decrease which might give me an oppertunity to get another mortgage?

Is that idea plain stupid?

Thanks.

kingstreet

The first part of your post makes no sense. Even in the heady days of Together lending by Northern Rock, you never got a mortgage above 95%.

What you paid for the property is 100%.

If you put down a 10% deposit, you had a 90% mortgage.

You can only be at 100% if the property has reduced in value. You feel it may have increased?

Put actual figures where the percentages are above and let's see where you're really up to...!

jimmyscot

Sorry i should have made myself clear. You are exactly right the mortgage was for 100% and the mortgage company gave me a loan for the other 10%. Anyway below are some rough figures,

Property bought for £115,000
Property was valued at £95,000
Mortgage was for £95,000
Loan was £10,000
Therefore total mortgage was £105,000
Deposit paid £10,000

Current left on mortgage is approx £100,000

kingstreet

So you paid £20k over the odds? A £95k property you paid £115k for? :eek:

jimmyscot

It is pretty common in the area especially at that time. The most recent prices for similar houses in the area were 110K and 120K.

DVardysShadow

jimmyscot wrote: »

.... Is that idea plain stupid?

The principle is sound enough. Where it would probably fall down is that your improvements may not have made a very significant change to the value. Consider the possibility that £1000 of improvements have increased the value by £200. When people are struggling to get mortgages for FTB property, £1000 of improvement might only push the house out of the reach of a noticeable proportion of your potential buyers.

Now is a good time for selling unimproved property and pricing within reach of FTB's. What is done is now done. But from now on, I suggest you put your improvement money into paying down the mortgage.

jimmyscot

Thanks for the reply. The improvements weren't done in mind of selling they were done to make it slightly more comfortable for living as i dont see us moving any time soon. I agree any money from now will probably go towards the mortgage.

Could it be that the property has naturally increased in price. Also i dont understand how i could have got the house valued at 95K if similar houses are selling for 120K. i know that the actual value differs from what people will pay but surely not by that much!?!

jimmyscot

Just to follow up on the post above in case it helps anyone else in the future. We did some number crunching and decided to move home. Through the process of selling we had a home report carried out and it turned out the house was valued at £110K which was an increase of £15K from 5 years ago. Which would give me a 90%LTV without putting any extra money into the property, therefore if i had looked into this earlier it might (along with some savings) have helped me reduce my rate significantly.