Do I have my property valued before remortgaging?

seagull12

Hi everyone, I'm new so please excuse any forum ignorance on my part.

I bought a house with my girlfriend 2 years ago by scraping together a 10% deposit. Our fixed rate ends soon and we're in the unusual (i guess) position of actually have a lower rate which our fixed rate ends (moving to a standard rate opf 3.99% rather than the 5.77% we currently pay).

I was happy to just let us fall onto thge standard rate and save around £160 a month on what we currently pay as, having looked at new mortgages, we would still be required to take out a 90% LTV (loan to value) as we still have 87% left to pay compared to the original value of the house.

However, having had a little look at zoopla out of curiosity, I saw our house price has apparently jumped (i know its not accurate) in such a way as that, if accurate, our LTV would be just under the 85% needed to secure a better rate.

What I want to know is, do I get the property independantly valued and then apply for an 85% ltv or would a mortgage provider completely ignore that and want to value the property themselves to determine the LTV % and, therefore, the mortgage rate I could possibly secure.

I'm so sorry for this being an essay! Thanks for any help you can provide.

crazygoog

I'm never normally in a position to comment on many things on here as I'm new to all this too. However, it's uncanny how similar a situation we are in just now, but I'm probably a few days / weeks ahead of you.

In 2009 we took out a 3 year fixed rate, but at the end of that I continued for a few months on SVR as that was lower than the fix, but I decided to overpay our mortgage by £40 per month to pay a similar amount that we were paying on the fix. Anyway, we bought our house for £84k but have spent a lot of money internally doing it up - new kitchen, bathroom, boiler, almost entirely re-plastered and rewired. I had a feeling that if we got it valued, it would come back very favourably, and in turn get a much better LTV. So we decided to get 3 local estate agents around for a free valuation. One said £95k, the next said £98k (witht the expectation of a sale price between £90 and £95k). The final guy said £100k for a quick sale, but upto £110k.

A £98k valuation would bring us close to 70% LTV, whereas had I stuck with the £84k valuation we would be above 80% LTV. Obviously a substantially better interest rate when you start talking below 75% LTV.

I am currently in the process of applying for a remortgage with an alternate lender, as my current lender is offering me nothing good. So I would suggest you do the smae as I did and get about 3 local agents to value your house and simply use that as a guide. Your new lender will need to value your house regardless, but I have put down a £98k valuation on ours in the mortgage application as that was almost straight down the middle. We do have some leeway to keep us in the bracket to get the deal we want, so if it comes back 2 or 3 grand either side of that value then we'll still be ok.

Hope that helps!

seagull12

crazygoog wrote: »

I'm never normally in a position to comment on many things on here as I'm new to all this too. However, it's uncanny how similar a situation we are in just now, but I'm probably a few days / weeks ahead of you.

In 2009 we took out a 3 year fixed rate, but at the end of that I continued for a few months on SVR as that was lower than the fix, but I decided to overpay our mortgage by £40 per month to pay a similar amount that we were paying on the fix. Anyway, we bought our house for £84k but have spent a lot of money internally doing it up - new kitchen, bathroom, boiler, almost entirely re-plastered and rewired. I had a feeling that if we got it valued, it would come back very favourably, and in turn get a much better LTV. So we decided to get 3 local estate agents around for a free valuation. One said £95k, the next said £98k (witht the expectation of a sale price between £90 and £95k). The final guy said £100k for a quick sale, but upto £110k.

A £98k valuation would bring us close to 70% LTV, whereas had I stuck with the £84k valuation we would be above 80% LTV. Obviously a substantially better interest rate when you start talking below 75% LTV.

I am currently in the process of applying for a remortgage with an alternate lender, as my current lender is offering me nothing good. So I would suggest you do the smae as I did and get about 3 local agents to value your house and simply use that as a guide. Your new lender will need to value your house regardless, but I have put down a £98k valuation on ours in the mortgage application as that was almost straight down the middle. We do have some leeway to keep us in the bracket to get the deal we want, so if it comes back 2 or 3 grand either side of that value then we'll still be ok.

Hope that helps!

That's fantastic advice. I will certainly look into doing it that way.

Thank you.

crazygoog

seagull12 wrote: »

That's fantastic advice. I will certainly look into doing it that way.

Thank you.

Not a problem. The advice I've been given by my mortgage advisor is that remortgaging is certainly a lot less daunting than initially mortgaging. Good luck and let me know how it goes!

amnblog

Forget the agents

Hop on zoopla online and check recent sales of the same type of property in your area.

crazygoog

Zoopla only gives half the story though. For drive by valuations it might be fine, but if you have done a lot of internal work then the overall average for the area is pretty wide of the mark (especially so in my case).

seagull12

That's the thing. As it was our first property it is obviously not the highest value property. We purchased for around £180k and have £158k left of mortgage repayments (only 33 years to go!) so the value of the property going up by even a little bit really could push our LTV under that magic 85% margin which would make remortgaging a lot more worthwhile for us.

I think I'm certainly keen to get it valued as we are the most recent house sale of a similar property in our immediate area (purchased two years ago), yet Zoopla values us at £8k higher than what we paid.

I've always been adament I wouldn't want it valued all the time I'm happy there as it just leads to either disappointment (that the value is worse than imagined despite pouring thousands into it) or that it is so high that I would be tempted to sell (when i'm more than happy there).

However, in this scenario I think getting it valued may be the key to see if I've fallen below the 85% LTV.

Thanks everyone for your advice and I'll post my findings.

jonomassey

Just out of interest was your house a new build when you purchased it?

amnblog

crazygoog wrote: »

Zoopla only gives half the story though. For drive by valuations it might be fine, but if you have done a lot of internal work then the overall average for the area is pretty wide of the mark (especially so in my case).

Zoopla holds information of the kind the valuations use. What similar properties are selling for.

Internal work might look nice but it is not something a valuer can accurately build in to a valuation.

crazygoog

amnblog wrote: »

Zoopla holds information of the kind the valuations use. What similar properties are selling for.

Internal work might look nice but it is not something a valuer can accurately build in to a valuation.

In 2009 I paid £84000 for a house that was originally on the market for over £90k. We have since done the aforementioned work and spent a hell of a lot of money inside. Home values since then have remained fairly static, yet Zoopla now have my house valued at £77k, hence my scepticism of their valuations. If my value comes back anywhere near as low as this then i'll be mortified, but I expect in excess of a £90k value. This £13k margin on such a low value property could mean vast amounts more on a home worth around £180k. I would use a local valuer personally, but use Zoopla and Mouseprice for vague voyeurism only.

seagull12

jonomassey wrote: »

Just out of interest was your house a new build when you purchased it?

No it was not.