End of fixed term, valuation issue!

Colly83

I've just come to the end of a three year fixed mortgage with Yorkshire Bank, our first three years on a 25 year mortgage, house bought at £108,000 (originally listed at £115,000) and with around £92,500 still to pay. Yorkshire failed to send out any notifications as to where we were or our options until this week when I chased them, so we did some digging ourselves and had a meeting with Halifax regarding a remortgage. Their mortgages start at 85% LTV which we're just over at the moment so we needed their valuation to come in just above what we paid, and since we've done up pretty much the whole house (new bathroom, carpetted a huge chunk of the house, replaced the knackered windows and doors with UPVC) since we moved in we thought we'd be okay for it. Unfortunately we found out this morning the surveyor valued it at £102,500, so no good! Do we have any options regards a second opinion, or is this just the way the markets gone in the last three years?

We're now trying to decide where to go next, if we stay with Yorkshire and take a new fixed rate would it be revalued again or would this just be a continuation of the current mortgage, i.e. is it worth us waiting a few months on the SVR to get us below the 85% as this seems to be the first point the rates start to improve?

Or is it worth us taking the risk with another provider (Santander seem to be doing good deals) and hoping their valuation ends up better?

I'm not panicking too much as we can pay whatever rate is necessary (though not looking to overpay at this point, holiday to save spending money for next year and a toddler roaming around), but we were just looking to improve our current deal, and Yorkshires don't seem fantastic even for lower LTV's, so I'm sure we'd be looking to switch at some stage in the future.

Apologies its rambling, any advice welcome!

Jimbo1976

You can't really challenge the surveyor unless you have firm evidence of something they have missed.

Ultimately the surveyor will base their assessment on local sold prices. So have a look on rightmove and zoopla to see what similar properties have sold for locally. You can also look at trend prices for your local postcode so you can see what has been happening with house prices locally since you bought.

Whilst putting in a new bathroom, new carpets and windows are useful in making it more attractive to new buyers they don't tend to add a lot to the value of the property, compared with major things like extensions, conservatories etc.

If you stay with Yorkshire it will probably use an index (ie take your purchase price and then update this based on local house price changes in the last 3 years). Give it a call and it will explain. It should be able to give you this figure over the phone so it may actually be higher than the surveyor figure so you could sneak under 85%

Colly83

I'd thought as much to be honest, few houses on the street struggling to sell at the moment. I'll have a chat with Yorkshire and see what we can get, just bad timing I suppose.

RenStar

I don't know what the SVR is for Yorkshire but is it much worse than the rate you were on before? In this climate of low interest rates, many people are choosing to stay on their SVR as base rates don't appear to be going upwards anytime soon. I know you're after security but we've been on Nationwide's BMR for the past 2 years and its the best thing to have happened to us actually! Like you we've lost money on our home from buying at the top of the market back in October 2007 and if we moved today we'd be looking at a 20k loss on what we paid, never mind all the money we've ploughed into the house since! Count yourself lucky yours is as small as it is. I know someone who has just lost £109k (bad choice of property, wrong area, redundancy then divorce so not had a great few years). We have three littles ones too so we've essentially been saving all over again for a deposit whilst we've been on the BMR rather than overpay as we didnt want to take the risk of our overpayments being eaten up by any further decreases in value. We really do need a bigger place.

I would say (and I am no expert), if you don't need to move and you can afford to the SVR why go to through the expense of re-mortgaging elsewhere? Sit tight and keep an eye out; as a short term plan I don't see anything wrong with this as most people don't seem to thnk IR are going anywhere realistically. Longer term 5 years+ I'd be a little more concerned, but not now! Stop worrying and enjoy the upcoming festivities

Colly83

Thats just it really, we're not worrying about it but we signed up to a daft 6.something% fixed rate when we bought our house and don't want to get tied into that again. Our SVR is 4.95% so its actually much better than the rate we've been on, so I think we'll just stick with it. Only slight disappointment is Halifax's deal if we had been under 85% had a load of cashback incentives (would've got about £550) and was about the same rate, but no disaster.

Count ourselves very lucky to even afford a house, and we are looking forward to Christmas!

TonyMMM

Go onto the SVR for now, but continue paying the same amount as you are (for your fixed rate) and let the overpayment reduce the capital - that way you will have more chance to re mortgage when you see a deal you like.

hawk30

We had a fixed rate with YBS and when it ended we just applied for one of the fixed rates that they give to existing customers. We certainly didn't have a valuation, but then we had a really good LTV to start with.

boxrick

My house was "undervalued" by as much as 10k. This was pretty much 10% of the value of the house, a real killer. The issue is my house is a one of a kind in the area making the value very difficult to judge.


Either way I somehow managed to scrape together the funds to do the re-mortgage I wanted. It did leave me with no savings though

Thrugelmir

boxrick wrote: »

The issue is my house is a one of a kind in the area making the value very difficult to judge.

Uniqueness doesn't always warrant a premium. Particularly in a falling\stagnant market.