New home - worried about future LTV when remortgaging

milsomd

I'm a first time buyer who has just had an offer accepted on a 3 bed house for 210k in Bristol. The house is on a quiet street, has a garage, new kitchen/bathroom, decorated to a high standard, good transport links, close to a decent primary school etc. Ticks all the boxes for us.

I offered the asking price, which seems reasonable for the area considering the price other houses marketed for - however the price of other houses on the same road are a bit hit and miss.

The house next door sold for 163k in 2011 in a run down state - and Zoopla (I know they are far from reliable) now estimate it to be worth around 195k. Another dated house sold for 190k recently too a bit further up the road. A similar 3 bed on an adjacent road has just sold for 215k though - to give an indication of the general area prices.

What I'm worried about is my LTV when I remortgage in 2/5 years time, if the lender values the property lower than what we paid, driven by the street average.

I'm happy to pay a small premium (perhaps we are paying 2-5% more) to get a house where we don't need to do any work because we don't have the cash, but I'm worrying that in the future the average house prices on the road will be a bigger factor in the valuation to lenders than the condition of our house.

As we only have a 10% deposit, a bad valuation might lead to us being on the same LTV range or worse in a few years time, despite paying our mortgage for a few years.

Has anyone been in a similar situation or could offer any advice?

Much appreciated

lee111s

Do you have the option to overpay on your mortgage to bring down the amount owed, thus increasing your loan to vlaue to counteract/negate any future valuations?

If you were to stick with your same lender they don't do a physical valuation, they use a desktop valuation based on the average price increas of properties in yor area.

amnblog

Who can say how the market value of your property will fare?


It is a risk we all take.

Thrugelmir

Overpay the mortgage. Reducing the debt owed is the only way of ensuring that you will increase the equity in the property.

What I'm worried about is my LTV when I remortgage in 2/5 years time,

In 2 years you won't make a significant impact if you don't. Remember house prices can fall as well as rise.

milsomd

Thanks for the replies. I didn't know that keeping with the same lender removes the need for a physical valuation.

As suggested I was also planning to overpay on the mortgage to reduce the risk. We can probably put an extra £100 a month towards it, and a 2k lump sum at the beginning. Hopefully that goes someway towards helping!