Bank overvalued property

candy-lou

PLEASE HELP!!!!!!!!! I am trying to buy my first home, I am a teacher and am doing it on my own. I found a 40% shared ownership new build property in my village, applied for this at Easter, had it accepted in May half term and my mortgage was sent off beginning of June. The house was up for £245,000 so 40% share at £98,000. Nationwide have since valued the property at £285,000 (the same price as the 3 bed house). Everyone said ooo that's great for you …. turns out not so much, they are now saying they'll only offer a mortgage at their value amount, so I can either stick to 40% but I'll need to borrow more, or I stay at what I am borrowing but reduce my share to 34% which will increase the rental side. My neighbours house is exactly the same, minus a garage, they had the property valued by Barclays who came up with the same figure that it was originally up with (£240,000) suggesting Nationwide think my garage is worth £45,000. I am at a loss of what to do, we appealed the valuation but they wont revalue and have rejected the appeal. I have phoned through to complaints who were not interested at all (even through my tears). I do not understand at all, surely it's nothing to do with the bank what I should spend on a house? The council have agreed the £245,000 and are obviously not wanting to increase the value their end as they want it to be affordable. Minus going through another bank (Barclays are comparable but no £500 bonus on completion). I have googled until the cows come home but nothing about banks overvaluing can be found, only undervalue. Please help!

Comms69

candy-lou wrote: »

PLEASE HELP!!!!!!!!! I am trying to buy my first home, I am a teacher and am doing it on my own. I found a 40% shared ownership new build property in my village, applied for this at Easter, had it accepted in May half term and my mortgage was sent off beginning of June. The house was up for £245,000 so 40% share at £98,000. Nationwide have since valued the property at £285,000 (the same price as the 3 bed house). Everyone said ooo that's great for you …. turns out not so much, they are now saying they'll only offer a mortgage at their value amount, so I can either stick to 40% but I'll need to borrow more, or I stay at what I am borrowing but reduce my share to 34% which will increase the rental side. My neighbours house is exactly the same, minus a garage, they had the property valued by Barclays who came up with the same figure that it was originally up with (£240,000) suggesting Nationwide think my garage is worth £45,000. I am at a loss of what to do, we appealed the valuation but they wont revalue and have rejected the appeal. I have phoned through to complaints who were not interested at all (even through my tears). I do not understand at all, surely it's nothing to do with the bank what I should spend on a house? The council have agreed the £245,000 and are obviously not wanting to increase the value their end as they want it to be affordable. Minus going through another bank (Barclays are comparable but no £500 bonus on completion). I have googled until the cows come home but nothing about banks overvaluing can be found, only undervalue. Please help!

It's not... as long as you're not using them to pay for it. But you are.


If they cant provide you with what you want, you'll need to use another lender.


Im not sure why you're complaining to them, they are obligated to lend you money.

Throwaway1

candy-lou wrote: »

PLEASE HELP!!!!!!!!! I am trying to buy my first home, I am a teacher and am doing it on my own. I found a 40% shared ownership new build property in my village, applied for this at Easter, had it accepted in May half term and my mortgage was sent off beginning of June. The house was up for £245,000 so 40% share at £98,000. Nationwide have since valued the property at £285,000 (the same price as the 3 bed house). Everyone said ooo that's great for you !!!8230;. turns out not so much, they are now saying they'll only offer a mortgage at their value amount, so I can either stick to 40% but I'll need to borrow more, or I stay at what I am borrowing but reduce my share to 34% which will increase the rental side. My neighbours house is exactly the same, minus a garage, they had the property valued by Barclays who came up with the same figure that it was originally up with (£240,000) suggesting Nationwide think my garage is worth £45,000. I am at a loss of what to do, we appealed the valuation but they wont revalue and have rejected the appeal. I have phoned through to complaints who were not interested at all (even through my tears). I do not understand at all, surely it's nothing to do with the bank what I should spend on a house? The council have agreed the £245,000 and are obviously not wanting to increase the value their end as they want it to be affordable. Minus going through another bank (Barclays are comparable but no £500 bonus on completion). I have googled until the cows come home but nothing about banks overvaluing can be found, only undervalue. Please help!

You're going to need to:

a) borrow more
b) have a lower percent share
c) find another lender

I know it's sucks for you but complaining to them or crying won't change their valuation.

Incidentally, the bank (HSBC) are about to value the house we have put an offer in once it can get booked in and I'm praying they overvalue it! (We've gone quite high as it's our dream house). If they don't then we face similar harsh choices as to either stump up more deposit, go into a worse LTV bracket or walk away.

studentguy

I don't understand, I've heard of undervaluations and the issues around that, but an overvaluation should be a blessing surely? How can the bank demand the OP pays MORE for the house?

candy-lou

This is why I am confused, I am not making a query against the valuation but what the bank are now saying I must do in response? They cannot give me and answer about it.

Smodlet

studentguy wrote: »

I don't understand, I've heard of undervaluations and the issues around that, but an overvaluation should be a blessing surely? How can the bank demand the OP pays MORE for the house?

It is a problem because it is shared ownership. 40% of £285k is more than 40% of £240/245k and the OP cannot afford the increase, it seems. She can either reduce her ownership to 34% and keep the mortgage payments at the same level but pay higher rent on the remaining 66% or borrow more to keep her ownership at 40% with the corresponding increase in mortgage payments but keep the rent at the original level. Either way it will cost more than she had budgeted for.

Had she managed to buy a house the conventional way, 100% ownership and managed to secure a house valued at 285k for 245k, she would be laughing but shared ownership is a different ball game.

P.S. If crying to mortgage lenders worked no-one would ever have their home repossessed.

takman

Smodlet wrote: »

It is a problem because it is shared ownership. 40% of £285k is more than 40% of £240/245k and the OP cannot afford the increase, it seems. She can either reduce her ownership to 34% and keep the mortgage payments at the same level but pay higher rent on the remaining 66% or borrow more to keep her ownership at 40% with the corresponding increase in mortgage payments but keep the rent at the original level. Either way it will cost more than she had budgeted for.

Had she managed to buy a house the conventional way, 100% ownership and managed to secure a house valued at 285k for 245k, she would be laughing but shared ownership is a different ball game.

P.S. If crying to mortgage lenders worked no-one would ever have their home repossessed.

I don't see why an overvaluation would be a problem.

If the OP is buying 40% at £98,000 and the bank are saying it's worth £114,000 then the bank should see that as less risk surely because its a higher LTV ratio.
I don't see why it being Shared Ownership would mean the bank have to value it exactly the amount that is being paid.

Pixie5740

Is not getting the £500 cashback really a good enough reason not to ditch Nationwide and go with Barclays instead? Whatever Nationwide's reasoning is they don't have to lend you the money so if they don't want your custom then give it to a lender who does.

sevenhills

candy-lou wrote: »

The house was up for £245,000 so 40% share at £98,000. Nationwide have since valued the property at £285,000 (the same price as the 3 bed house).

Is Nationwide your lender?

candy-lou

sevenhills wrote: »

Is Nationwide your lender?

Currently, I have booked an appointment elsewhere for next week incase it is not resolved

lindens

takman wrote: »

I don't see why an overvaluation would be a problem.

If the OP is buying 40% at £98,000 and the bank are saying it's worth £114,000 then the bank should see that as less risk surely because its a higher LTV ratio.
I don't see why it being Shared Ownership would mean the bank have to value it exactly the amount that is being paid.

She was only buying 40% as she could afford £98K. Now 40% is working out at £114K she cannot afford that.
So she cannot afford to stump up the extr £16K so she will have to reduce the percentage down to 34% in this case. which means the rent is more. Lose/Lose