Wrong Rate Given? Miss sold mortgage?

monkeykong1

We recently brought a flat in London for £223,000. However the surveyor devalued it to £210,000 and put a retainer of £10,000 for some work that needed doing on the roof.

The bank lent us £179,000 at 5.29% with a £900 booking fee (5 years fixed). The problem is the figure was based on a 10% deposit. We have actually put down either 19.7% down if the true value is £223,000 or 14.8% at the surveyors value of £210,000

Either way the initial figures were all based on a flat at £223,000 with a 10% deposit, do we have a case to challenge it. I think it was miss sold as the deposit was greater than they initially based calculations on.


Any advice would be great.
Clive.

kingstreet

A lender lends on the lower of purchase price or valuation.

A mortgage of £179,000 on a value of £210,000 is 85.2%.

Once the retention is lifted and you drawdown the extra £10k, you'll then have a mortgage of £189k on a value of £210k. That's 90%.

You are still in the 85% to 90% LTV band, so what do you think they have done wrong?

Thrugelmir

How much did you pay for the property?

dunstonh

However the surveyor devalued it to £210,000 and put a retainer of £10,000 for some work that needed doing on the roof.

property values are opinion. Flats tend to be quite overpriced by estate agents (knowing they will be knocked down). Flats tend to be the worst to suffer in house price depressions as well. So, a bit more caution is often put on flat prices. You havent been devalued. Just told the value is not likely as much as you thought it was.

if the true value is £223,000

There is no true value. The value that matters is the professional valuation. Not what you buy it for.

I think it was miss sold as the deposit was greater than they initially based calculations on.

You were given a rate based on a property value that you exaggerated (possibly an estate agent valuation that you didnt knock down enough). The valuation has come in lower and with a retention. So, your deposit has to reflect that valuation.

There is no mis-sale here. Not even sure how you can get that idea as its absurd. It is mostly your misunderstanding of how the valuation works.

monkeykong1

Thanks for the help everyone sorry for my absurd misunderstanding.