Remortgaging and Revaluation

toddler9

Hello I am looking for some advice about getting a new mortgage deal since our's is coming to an end in August with Natwest.

We had a quick catch up with the customer advisor in Natwest branch today before our Natwest mortgage advisor meeting in a few weeks.

Our situation is currently-
House Purchased 2 years ago for £96,500
Current Outstanding Mortgage £86,000
Natwest fixed 2 year rate of 5.49% (£456pm) ending August

We bought our house at a 90% LTV 2 years ago, however since then we have done a lot of work on the house including new boiler, new bathroom, completely redecorating and landscaping the garden (it was owned by an elderley lady before) ad we now think that it would be worth more than the £96,500 we paid for it and would therefore fall into the 85% or 80% LTV category now giving us access to better rates. Similar houses in our area sell for around £115,000. However the man at Natwest today gave us the impresssion that those kind of improvements wouldnt affect the value of the house as it is in his words "just bricks and mortar we value".

He said the rate we would most likely to be offered (at 90%LTV) would be 5.19%. However if we don't sign up to a new deal we would go onto their SVR at 4%!!

So my questions are:

• Should we push to have our house revalued by Natwest to see if we can get a better rate or would it be pointless?

• Can Natwest refuse to give us a new mortgage deal/keep us on SVR when ours runs out and then we have to give our house back? (My salary has risen by £6k since we got our exisitng deal however so have our CC debts due to our wedding :mad:)
• Shall we contact a mortgage broker to get a new deal elsewhere? (I am very worried about doing this as we had a horrid experience trying to get a FTB mortgage with YBS which well and truly burnt our fingers)

I am sorry if any of there are very stupid questions- we are both just completely confused and a bit scared!

Thrugelmir

Your mortgage lasts for the term you applied for at the outset, i.e. 25/30/35 years etc. All that's ending is the current product. By doing nothing you will default automatically onto the SVR. So the NatWest aren't going to refuse/withdraw your mortgage.

Improvements are extremely subjective in terms of added value.

Remortgaging to a new lender will cost money. Mortgage redemption fee, valuation fees, legal fees, product fees. So not a cheap exercise.

One option you may not have considered. Is that given the higher fixed rate on offer. You could always drop onto the SVR and use the saving to overpay your mortgage. Even if BOE increases SVR will only track the movement. So likely to be 0.25% increases at a time.

toddler9

Thank you for your response. What you said about dropping onto the SVR and overpaying seems like the perfect option really. We did actually mention this in our meeting with Natwest today and the man got very aggresive with us about interest rates rising and "did we want the meeting with the mortgage advisor or not?!". Since we can leave the SVR and go onto a new deal at anytime with Natwest it seems like the best option. Many thanks for your help.

Tillytwopaws

I don't work for NatWest, but for the lender I work for the criteria for offering a revaluation of the property would be based on whether you have increased the accommodation size, purchased further land or completed a major renovation. If these criteria don't apply then we would ask whether you have knowledge of properties near yours, of the same type and construction selling in the last couple of months for a higher value. The revaluation would be done at our expense and you could not dispute the valuation figure. Ie if it came back lower, that's the figure we would work with going forward but you would be made aware of this beforehand. The other thing to bear in mind is that we would only instruct a drive by valuation so although in your case you have done a lot of interior work to the house, this would not be taken into consideration.

toddler9

Thanks so much for your response Tillytwopaws. I really find the whole thing fascinating, that you could completely renovate a property (without an extension) and the bank does not see this as a value-adding exercise! However when you then sell the house those kind of improvements add value as far as the estate agent is concerned (in most cases), someone then buys the house for the increased price and all the mortgage company does is visit the house and agree with the price agreed between buyer and seller! (again in most cases).

Also drive-by valuations seem crazy too- in a row of terraces for example each house is going to be very different behind the facade so how can that give a realistic value? I was wondering if you live in a house for many years, say like 20 years and in the meantime the house prices have increased as a whole - would the bank still say your house was worth what you originally paid for it?

Obviously the rules will always work in the lenders favour and so we must push on to overpay our mortgage to get out of the 90% LTV category

creditcarddebt

Hi Toddler9

I am having the same problem, I have my mortgage with Natwest and when we purchased the property an extension had been started, was really just the blockwork, and my husband finished it. We purchased the property for 275,000 and that was the value given when the standard mortgage valuation was done for the purpose of the mortgage. All well and good. On the notes on the valuation it was stated that once the extension was completed the value would be in the region of 325,000.

However, it is now time for our fixed deal to come to an end. They still have the value at 275,000. I called and spoke to an advisor who informed me that I could have them instruct a valuation at a cost of 346.00 or that they would accept a value done by an estate agent. So we got an estate agent to value the property ( they valued it at between 300,000 - 325,000), sent it off along with the original mortgage valuation stating the value of the property would increase once the extension was completed. I heard nothing, so called them up again only to be told that I had been misinformed and that they would only take into account a valuation that they had instructed. They are not even applying common sense in the fact that the property value had to have increased as effectively it had gone from a 1 bed 1 bath, to a 3 bed 2 bath property.

Am slightly frustrated by this!

skinners14

Hi There, Just like the posting from creditcarddebt we too are having big problems with NatWest and LTV and it would seem they only way it can be resolved is if you instruct one of "their" registered valuers for a sum of £346.00!!! I have been speaking with NatWest for approx. a month now and every time I call I get a different story about "HPI" which they initially said was the Halifax Price Index and that they subscribe to this desktop valuation when placing a new valuation on the property....when I managed to get a Halifax Price Valuation and a Land Registry Price Valuation and othesr which showed that they were undervaluing my property by between 80K and 95K...they then said they DON'T use the Halifax (HPI) one but one they have for themselves which is "modelled" on the Halifax one??? Confused yet? I would suggest that this is purely another fee (£346) and money making opportunity for NatWest along with the product fee for the new fixed rate (we are not asking for more money or a longer term, just a new fixed rate). Think about it, what could be an easier/better way for them to make even more money out of their "loyal" customers but to set "their" HPI valuations at a considerably lower rate than everyone else and then charge the customer to re-value their properties so that they can qualify for the lower LTV rates and hence monthly payments.....as Del Boy would of said "what a nice little earner Rodney". One last thing everytime I call them my LTV has changed from 72.65% to 70.45% and then today to 70.88% have asked them for the formular on how they calculate the LTV and they said it was top security!!!!! The valuation they are using for my property is for Jan 2010.....using all the other LTV HPI valuations I should be on a LTV of 60%....I have got absolutely nowhere with NatWest as each telephone call gives different and conflicting information.....so it's off to the Ombudsman for me now.....will let you know how I get on...good luck to anyone using NatWest and trying to remortgage, just make sure you have got a spare £346 or are prepared to pay the higher LTV rates.

toddler9

Hi All

I thought I would update with some news I had from the Natwest in branch Mortgage advisor this afternoon. She called ahead of our meeting in a few weeks to check a few details with me and to tell me about the interest rates we would be offered. I told her that it would be more beneficial for us to drop onto the SVR then to go onto one of their 90% LTV rates which she agreed with. I then asked her about getting the house re-valued to see if she had the same thoughts as her colleague. She said it would cost £254 and we would have to go with whatever value they said. She then did a desktop valuation on their system which valued our house at 15% more than we paid for it 2 years ago and said that we are now eligible for 80% LTV rates!!! She said I could either go into the branch or switch online. I asked if I still have to pay the £254 valuation fee and she said no because the system had valued it more so they would just go with that! This seems too good to be true!

I am away with work at the moment but when I get back home at the weekend I am going to try and switch online. I will report back.

Weirdly after the phone call she sent me an email to phone the bank's Debt Management department to address the small arrears on the mortgage before i switch. I have never missed a payment or even been late so this was a shock! When I called the helpline they practically laughed at me and asked where I got the number from as I have never missed a payment or been late (as I knew!) so I shouldn't be calling them. I sent an email back to the mortgage adviser and she said it must have been an anomaly on the account...very very strange how 2 people working in the same organisation can see different things and worrying for me!

Tillytwopaws

Glad the MA did an online valuation before you parted with £254.

Albert_Tatlock_2

EDIT: wrong thread