Nationwide, Remortgage and Valuation Advice

JasperW

Hi
Just after a bit of advice on our remortgaging options.

We purchased in Jan 2011, borrowing 85k on a 3yr Nationwide tracker at 85% LTV on a purchase price of 100k. The valuation was carred out Aug 2010 which valued the property at 100k.

We have done a lot of work to the property around 15k albiet some of it cosmectic but some of it has addressed the identifed issues in the original valuation. An identical property in the street has just sold for £117500.

We would like to remortgage as we have a child now and I want the poece of mind of a fixed rate, plus I think rates are only going one way. In addition we would be hoping to consolidate some of the money we borrowed in doing work to the property. All in all looking at borrowing 90k.

Just wondering what are the odds of Nationwide revaluing the property and getting it any where near the 117.5k the neighbouring property sold for? I accept 17.5% is a pretty big jump in price but cant see why it wouldnt be if an identical property has sold for the that amount.

We are interested in the switch and fix option from Nationwide given that we wouldnt incur any ERC but Im guessing they would just switch the deal based on outstanding balance and previous valuation or is there the option to borrow more and revalue?

Our other alternative is to remortgage with another provider which will cost 2.5k in ERC but will we have a better chance of acheiving something closer to the valuation we want?

Appreciate any advice or tips people may have.

Gary123456790

Hi,

The mortgage valuation is not a market valuation. Its a worst case repossession and quick sale valuation so is very unlikely to come in at what the other property sold for. Also just because one person is willing to pay £117,500 doesn't mean all houses are worth that - just that they were willing to pay it!

I would like to sound a word of caution - 18 months ago you owed 85k. Now you owe 90k. Its generally a good idea to pay off your debts but you owe more now than when you bought the house.

In terms of rates, I fixed in December and rates have fallen since then. I cant seem the economy dramatically picking up for quite a while.

Check out the 'ditch my fix' calculator at http://www.moneysavingexpert.com/mortgages/fixed-mortgage-calculator
Gary.

Gary123456790

Forgot to ask - what rate are you on?

JasperW

Thanks for the reply, current rate is 3.79 + base rate.

Presumably a lender would have had to value the property at 117.5k in order to lend on that property? We were prepared to pay 120k but only paid 100k base on the valution.

princeperch

I did something sort of similar.

purchased for 250k in July 2011 in London. Noticed that similar flats sold in developments very close to mine for 265/270k ish. Got estate agents in, they all valued at 300k.

remortgaged 1 year into our 3 year fix and the bank valued it up to 265k (I went for 270k as a valuation but they chipped me 5k)

as we had paid the mortgage down over the last year, that took us from paying 6.09pc with the coop on a 90pc mortgage to 3.04pc (500 quid fees) with another lender.

happy days.