Remortgaging - panicking about valuation and LTV / interest rate

19lottie82

My fixed rate mortgage with the Halifax is coming to an end. My rate isn’t terrible, but not brilliant, so needless to say I have been looking elsewhere for a new deal.

I bought my property in June 2009. It was valued, by 2 separate companies, at £110k, but I paid £105k for it.
I don’t really know much about how much the housing market has moved in my area since then, but in my (albeit, uneducated) opinion, I’d say it seems to have stayed pretty static.
I have done some work to the property since I bought it (new boiler, loft insulation, new bathroom, wooden floor in living room and a few other things), and a similar property in the same block sold for £110k last June, after only being on the market for 3 weeks (and mine has a much larger lounge).

When I’m speaking to potential new lenders about the possibility of a mortgage, when they ask me what the value of my property is, I’m saying £110k, but that’s just a guess.

Originally I took out a 75% mortgage and I currently have £76k outstanding on my mortgage, so if I went to a new lender, then I expect that they would conduct a valuation report on my property? If they value it at less than £101k then I will lose my 75% LTV rate and therefore get a worse rate of interest.

The best deal I have found is with Leeds BS, BUT they charge a £199 application fee, which I am wary about paying in case they give me a really low valuation for my flat.

I think I’m just panicking as I really have no idea how the value of my home might have changed in the last 3 years and I’ve heard horror stories of lenders undervaluing homes, as they can tell you what they like and there’s nothing you can do about it? To what extent is the latter true?

I’m sorry for rambling and I hope this makes sense!

19lottie82

PS – Another reason why I am having a mini freak out is, when I went to make an initial enquiry with Halifax about a new deal, they told me that according to their system my flat is now only worth £98.5k! I told them that I doubted this, my main reasoning being the slightly smaller flat that sold recently for £110k.

They told me that this estimate is only based on their computer system that uses sales in my postcode since I bought my property, and as the quality of housing in my postcode varies greatly (a 2 bed flat can cost anything from 60k – 250k), this could explain the low valuation.

rich11

You may have to pay for an independant valuation.We recently re-mortgaged our property and the Building Society had it valued at £169.000. The independant valuer had it at £230.000

19lottie82

So, I guess what i want to know is.... is it the norm for re mortgage valuations to be low?

Dave_Ham

Do not panic, as stated any computerised valuations are on the low side.

It would be incredibly unusual given your information provided that the valuation would be anything under what you require.

Taking to a new lender will typically be fee free valuation and then you can take or leave, but sure you will be fine at 75%

Good luck

The_J

Halifax index valuations are notoriously conservative. Halifax's own valuers (Colleys) when paid to reinspect are adding 5-10%.

19lottie82

Thanks guys, hopefully I'm worrying over nothing. Will let you know what they come back with....