Re-mortgage with same lender: how does valuation work?

m0rgana

We're looking to take advantage of the good rates around at the moment having come out of our 2 year fix six months ago. As I've heard that sticking with an existing lender is more straightforward, this is probably our preferred option, but how does this work in terms of the valuation?

I know a few people who have gone on to a new product with their existing lender, and have not had to have a valuation done as part of this process, but i find this odd when the whole question of which products you can access hinges on 'loan to value'.

We think we are somewhere between being able to get a 60% LTV deal and a 70%, and the difference in rates is pretty significant.

Will the existing lender simply base your homes value on its initial assessment? IF they do this i am pretty sure we'll lose out, as we got our house at a lowish price and have done some work on it. Also, house prices have risen in similar properties on our street. Can this be taken into account?

thanks
M.

elsien

I've remortgaged with the same lender a couple of times and never had another valuation done. If you're not borrowing any more money, I don't see the point.

Something

I believe each mortgage company will have their criteria based on how much the believe the property is worth, in my experience a 5 minute call to the company is all it takes to find out how much they currently believe its worth, your options for disputing that (if you believe its wrong), and what LTV they can give you (including final mortgage costs etc). Probably a lot quicker and more simple than asking here to be honest.

Call them and ask, rather that worrying and speculating, then you can mover forward, you might even be pleasantly suprised.

Not sure who your lender is but Halifax could pretty much answer most questions within 2 minutes

olly300

The only reason to have the property revalued is if when you brought it, it needed some major work to get it up to the value of other properties in the area.

So for example the property was worth 40k less as it needed a new roof and kitchen, you've done the work and now want to see if you can get a better loan-to-value to reduce your interest rate.

kingstreet

<pedantmodeon>A change of product with your existing lender is exactly that, a product transfer or customer retention product. A remortgage is repayment of one mortgage using a new mortgage with a new lender, where a change of mortgage deed is required.<pedantmodeoff>

Many lenders offer customer retention products based on the "indexed" value of the property. This is based on the original purchase price, with a current value based on the average house price for the given area since then.

Some lenders will allow you to pay for a "drive-by" or internal inspection of your property if this will (in your opinion) yield a higher value and lower loan to value than the indexed value.

This is one you have to play by ear, if you want to go direct to your existing lender. We do product transfers for our Halifax customers and establish the indexed value before we start, so we can establish if a remortgage may be a more sensible option. Halifax pay us a fee when we secure a new deal for the borrower with them.

m0rgana

Olly> This is the kind of thing I'm talking about - we haven't re-furbished the entire place, but we have put in a new bathroom, installed central heating (which it didn't have at all when we bought) and re-plastered half of the rooms so I suppose that would count as fairly major work!

bigadaj

m0rgana wrote: »

Olly> This is the kind of thing I'm talking about - we haven't re-furbished the entire place, but we have put in a new bathroom, installed central heating (which it didn't have at all when we bought) and re-plastered half of the rooms so I suppose that would count as fairly major work!

Apart from the central heating this might have a minimal effect on a valuers view though. Use the free sites to view local prices and get a view on value against your current loan. If you look like being close to a band then a valuation might be worthwhile, but you'll almost certainly have to pay one way or another and no guarantee they'll give you the valuation you want.