Mortgage Lender Deceit?

glacial_2

Hi all,

We had a successful mortgage application, the house is perfect for our needs, all we required was a Home-buyers survey which we paid for amongst the mortgage fees, the report arrived recently and was fairly detailed, however, we noticed the following entries from the surveyor:

"We are pleased to advise you that in our opinion this property is, on the whole, a reasonable proposition for purchase at the agreed price"

'Great', we thought, not much in the way of building/maintenance issues either until we read on and noticed the surveyors own opinion towards the end which read as:

"In my opinion the market value on XXMarch as inspected was £280,000"

This is a shortfall of £15k from the £295k purchasing price, which now pushes back up to the 90% LTV bracket meaning our 2 year fixed will be £100 more P/M.

Besides the contradicting opinions from the surveyors, I have been told that the surveyor should not have added his opinion if it was within 5% of the purchasing price (which it is just by £250). Although the lender agreed with this, they still insisted that the £280,000 valuation was the one to go by and that if I wanted to contest this I would need to provide 3 x similar properties/price within the area which I have (not easy being a village location), since then we have been told that the evidence was not good enough without any reason behind the decision. I had provided enough examples and included the details as requested.
I am reluctant to ask the vendor to reduce the asking price and am fuming at the way the lender (major high street one) have acted so far.

We have already lost a little over £900 worth of fees with the lender which we will lose if we back out so they have nothing to lose, any advise out there? I have asked for evidence as to why they denied our examples of similar properties and will keep you posted.

I feel this is daylight robbery and although we are pulling out all the stops in terms of deposit to get a good 2 year fixed rate at an 85% LTV, we feel that it is a useless exercise and these low rates do not count unless your LTV is far lower.

ACG

Your anger is at the lender why?
The surveyor is the person paid to value the property, the lender (any lender) will go off the surveyors comments.

You have 3 choices:
1) Try and renegotiate the price,
2) Go for the 90% product,
3) Find a new lender.

Probably not the answer you were after but there is no point crying over spilt milk you need to crack on and find the best way forward.

amnblog

glacial wrote: »

I am reluctant to ask the vendor to reduce the asking price.

You would rather pay £15,000 more than it is worth?

glacial_2

Because if the 5% argument is a legal rule then the lender should dismiss the lower own opinion?

ACG

Its not a legal rule.

glacial_2

amnblog wrote: »

You would rather pay £15,000 more than it is worth?

of course not, the other opinion however suggest it's a valid purchase price.

Thrugelmir

"We are pleased to advise you that in our opinion this property is, on the whole, a reasonable proposition for purchase at the agreed price"

The caveat followed.

5% in terms of the property's value is neither here nor there. More than likely the surveyor considers a quick resale value to be lower. In light of the lenders risk. Something the lender may well have asked the surveyor to factor into their valuation. After all that's who the surveyor is working for. If you were injecting say £60k of your own equity then the lender would feel more comfortable with the exposure.

Landofwood

Congratulations, you must feel relieved that the surveyor has saved you £15k.

glacial_2

Thrugelmir wrote: »

The caveat followed.

5% in terms of the property's value is neither here nor there. More than likely the surveyor considers a quick resale value to be lower. In light of the lenders risk. Something the lender may well have asked the surveyor to factor into their valuation. After all that's who the surveyor is working for. If you were injecting say £60k of your own equity then the lender would feel more comfortable with the exposure.

Thanks, then why offer the lower rate at 85% if there a necessity to cover risk with lower safety net valuations which take precedent every time?
More punters pressured into higher rates?

Landofwood wrote: »

Congratulations, you must feel relieved that the surveyor has saved you £15k.

In what way? Only if the vendor drops the price which is very unlikely.

In a nutshell, the mortgage lender should not take the fee until the surveyor has been in.

JPB123

glacial wrote: »

In a nutshell, the mortgage lender should not take the fee until the surveyor has been in.

So, you shouldn't pay a fee until the valuation comes back at the level you want, then you might pay for it? And if it doesn't? You want someone to work for nothing? I take it you work for free then?

I am an Independent Mortgage Adviser

You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.

glacial_2

JPB123 wrote: »

So, you shouldn't pay a fee until the valuation comes back at the level you want, then you might pay for it? And if it doesn't? You want someone to work for nothing? I take it you work for free then?

No JPB123 I don't, but it's a good point.

Thanks anyway.