Proprty Value for Remortgage

Okydoky25

I am in the process of re-mortgaging my property as well as releasing some equity to pay off debt built up whilst doing home improvements.


Purchased at £300k
Looking to re-mortgage for £320k based on a valuations of £420k.
Outstanding mortgage is at £275k including £15k ERC
Additional borrowing 45k (£60k with ERC)
£27k Debts Consolidation and £18k additional to complete the house. New Driveway, decking etc.


New mortgage payments will actually be £200 lower as higher LTV and lower Interest rates as ours are currently high.


Affordability is not an issue.


I purchased the property less than 2 years ago. We believe we got the house cheap in the 1st instance and have installed new Boiler, Hi end kitchen, bathrooms and decorated throughout.


Will the new mortgage company do a proper valuation on my property or just use Zoopla as this is no where near what local agents believe it is worth. When we purchased Zoopla was showing it as a 3 bed semi and I changed this to a 4 bed Detached that it is and this did not amend the value on zoopla.


Worrying that the LTV wont add up if they undervalue.

getmore4less

How long before the ERC lower/zero?

Why did you not take a 2y to start with?

Have you worked out the true APR with the £15k fee.

Okydoky25

getmore4less wrote: »

How long before the ERC lower/zero?

Why did you not take a 2y to start with?

Have you worked out the true APR with the £15k fee.

It was a 5 year fixed in 2016. When we moved we had to take out a mortgage to run along side the original 5 year fixed that ends next year 2019 or pay the ERC then so now we have 2 ERC. Both I believe are 6% of whole loan amount.


I honestly don't know why we didn't take out a 2 year at that time so they both finished next year. Lesson learnt.

getmore4less

Break down your mortgage into bits/ERC into bits and look at additional borrowing from your current lender.

If one bit is ERC free next year it might be worth waiting and just do a top up now if it saves £15k

Okydoky25

My current provider does not offer additional borrowing for Debt consolidation. We originally was going to wait until next year to do as you suggest to save £7k on one of the ERC however when we checked we would be saving £250 a month with the new mortgage payments at the lower rate with this together with no other borrowing we would be better off by nearly £900 a month.


My biggest worry of all this is the valuation on the property to be honest. I don't doubt on the open market my house would sell for £420k+ and quickly but if they don't do a proper valuation and go on local market I am less certain .

Thrugelmir

Okydoky25 wrote: »

Affordability is not an issue.

Based on what criteria?

With a total debt in excess of £300k incremental increases in interest rates will soon have an impact.

£18k additional to complete the house. New Driveway, decking etc.

Will the unfinished nature of the the property impact the valuation?

getmore4less

You can't just use the payment to compare the costs of the options.

you may be better just borrowing/delaying the finish jobs and review when the first ERC is gone(won't the other ERC have reduced).

Okydoky25

Thrugelmir wrote: »

Based on what criteria?


Based on the online calculators we can borrow up to £410k. We want to remortgage for £320k and 'should' have £100k equity still in the property.

With a total debt in excess of £300k incremental increases in interest rates will soon have an impact.



Will the unfinished nature of the the property impact the valuation?

I don't think so. We are using the EA valuations we received late last year and those works were not done then. They are improvements we would like but not necessarily required. Example the drive way is gravelled but I would like to brick and landscape the gardens which are currently lawn.

Okydoky25

getmore4less wrote: »

You can't just use the payment to compare the costs of the options.

you may be better just borrowing/delaying the finish jobs and review when the first ERC is gone(won't the other ERC have reduced).

Having looked at both ERC they only drop by £100 or so a year.

getmore4less

That suggests ERC are going to stay at 5%-6% till the fixes finish

You need to run the numbers to work out the true cost of these final £18k of works.

caprikid1

I would not rely on EA valuations.


Remortgage Valuation = £350K
EA Valuation = £395K