Nationwide value using index is far below market value causing higher LTV bracket

ethank

I'm coming up to 2 year anniversary of my mortgage and the end of the fixed period.

I bought my house two years ago - a new build - and my house was one that fell through for another couple. The builder retained their deposit - For a quick sale I negotiated a 15% discount on the sale price. An identical one around the corner paid 25k more than me just three weeks later.

New houses on the estate are now 35% higher than what I paid.

Nationwide say using their house price index - My house has gone up 15% in value.

The offer they have made me is based on LTV of 60.71% - so I'm being offered a fixed rate of 1.64%

If the house reflected its true value - I would be below 60% LTV and thus get 1.44%

My current mortgage rate is 2.44% - It was my intention to get the lowest rate and then overpay to the 2.44% mortgage payment.

I've escalated the matter to the complaints team, and they've told me my only option is to go to the FOS.

Help

lee111s

It's not complaint you should be raising, they haven't done anything wrong that warrants a complaint.


You need to pay for a new valuation. Nationwide will then to send out a RICS surveyor to give a true valuation of your property based on its merits, and other similar sold properties within the last 6 months within a 1/2 mile radius. Valuations are somewhere in the region of £100.


The other option, is to make an overpayment on your mortgage to bring the LTV under 60% and therefore you'll achieve your require rate, plus you'll owe less on your mortgage.


It doesn't really matter what they value the property at in terms of potential sale price should you put it on the market tomorrow, you just want to be under 60% LTV.


The desktop valuation is just that, they add the price increase to the purchase price. You got a cheap deal, therefore, their calculations obviously won't give the same value of the property now had you paid 20k more when you bought it. It's not just nationwide who do this, all lenders do it.

ACG

You have to pay for a val as lee says.
The problem you may find is that paying the valuation fee may cancel out any savings the lower rate would have.

You could alternatively make a lump sum overpayment to bring it down to 60%?

Count yourself lucky they are doing what they do, my lender bases the valuation off the original purchase price unless I pay for a valuation.

pollyanna24

Does the fact that Nationwide give free valuations affect anything as I am having a similar problem with them possibly undervaluing my house? They have done a drive by valuation, but my situation is me buying my brother out of the property.

lee111s

pollyanna24 wrote: »

Does the fact that Nationwide give free valuations affect anything as I am having a similar problem with them possibly undervaluing my house? They have done a drive by valuation, but my situation is me buying my brother out of the property.

I don't think the fact they're not charging for them makes a difference. The actual valuation is done by a RICS surveyor and I don't believe they actually work for Nationwide but are contracted out.

ethank

They won't allow me to pay for a valuation, for rate changes, they only use their index value.

lee111s

Then I think you're stuck with the options of accepting the rate as it is, remortgage to a new provider (probably won't save any money by the time you factor in the costs, plus the time and hassle) OR as I mentioned, make an overpayment to bring you under 60% LTV. The latter is probably the best option as you'll also be reducing your overall balance, therefore you'll be paying even less interest going forward.

HENRY78

Sounds ridiculous to me. But the lenders know best!! The problem is your dealing with idiots with no authority. Computer says NO syndrome.


Good luck though.

thriftylass

pollyanna24 wrote: »

Does the fact that Nationwide give free valuations affect anything as I am having a similar problem with them possibly undervaluing my house? They have done a drive by valuation, but my situation is me buying my brother out of the property.

We just remortgaged with Nationwide and their evaluation (without viewing it, not sure how) was even a bit better than we expected. I was worried too that they would service their own interest and artificially lower it.

Landofwood

Just overpay a little and save yourself the aggro.

nidO

ethank wrote: »

They won't allow me to pay for a valuation, for rate changes, they only use their index value.

Your only real option here is to keep asking different advisors, ideally ones in branches.

I went through the same saga as you 18 months ago, the value of my house had risen much more in the prior 2 years than the index reflected.

Their phone staff and 2 in-branch advisors all had the same "nope, no can do a re-valuation, regardless of whether you offer to pay for it, it's physically only possible to use the index value when doing a product switch" then when we talked to yet another in-branch advisor her answer was "well yeah sure we can do that, when putting through the product switch we can just override the index figure and depending on how different it is the system will either accept it or request a re-valuation to be done".

She did that for us, put in the real value of our property, the system didn't even bother demanding a valuation be carried out (which, she clarified, would have been free), and we knocked 0.35% off our interest rate thanks to the lower LTV.