Bank overvalued property

candy-lou

lindens wrote: »

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

finally someone gets where I am coming from - any advice to follow - or just suck it up and forget it? literally the only way onto the property ladder and even that seems like it's not going to be possible now.

Comms69

candy-lou wrote: »

finally someone gets where I am coming from - any advice to follow - or just suck it up and forget it? literally the only way onto the property ladder and even that seems like it's not going to be possible now.

No no, we all got it the first time.


The point is that the lender will only accept that valuation.


Use a different lender.

mije1983

candy-lou wrote: »

any advice to follow - or just suck it up and forget it?

The advice hasn't changed. As mentioned above, either find a different lender, who may or may not value differently, or as you say 'suck it up'.

If this is the only way you can get on the housing ladder, then you may be better off taking a smaller % anyway. But that's something you will have to work out.

lindens

Accept their valuation or try a different lender. Have you spoken to the housing association to see if this has happened with any other buyer?

candy-lou

lindens wrote: »

Accept their valuation or try a different lender. Have you spoken to the housing association to see if this has happened with any other buyer?

Yes all 3 other properties were valued by their respective banks at the price they were being offered at anyway, so have all gone through. just mine being a pickle!

Throwaway1

candy-lou wrote: »

Yes all 3 other properties were valued by their respective banks at the price they were being offered at anyway, so have all gone through. just mine being a pickle!

Just try another lender, if Barclays are comparable then the £500 isn't worth worrying about. Then if their valuation is better then brilliant, no problems and if it's the same as Nationwide you have some tough choices to make.

Comms69

just on a side note: the garage, does that come with a driveway etc, whereas other houses have shared or designated on street parking?


Just wondering as that does sound like it would add a lot of value.

Pixie5740

Rather than applying willy nilly with other lenders it might be worth engaging a mortgage broker who specialises in shared ownership properties.

trevormax

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.

I'm with you on this one. It is not the bank who are selling the house.

If the vendor is willing to sell the OP 40% of the house for £98,000, then who are the bank to say that the vendor can not do that. The bank has no say over how much the vendor is willing to accept for 40% of the house.

If the vendor wants to sell 40% of the house for £1, why should the bank be able to tell the buyer (OP) that he/she is not allowed to do this, and needs to pay £x instead based on their valuation?

As far as I can see, if the vendor is happy to sell 40% for £98k, and sign to say that the OP now owns 40% after paying £98k, what is the problem?

Sure, the house may be worth more than that (40% is apparently £114k), but when the OP then decides to sell the house, they still get 40% of the value regardless of how much more or less they paid to buy it.

If anything, the vendors solicitor and the person/company who owns the remaining 60% are the ones who should be kicking up a fuss because they are the ones losing out.

Jane_B

I don't understand why the bank would go down this road, surely its better for them to lend less to the value of the house, instead of forcing you to pay more for a property

Its very strange, do you have a broker, as it might be Nationwide are actively trying to push you into using another lender. Which you will have to do, if this is their stance.

For example some car insurance companies, when confronted with a 17 year old male, will sometimes quote an obscene amount (I have seen some asking for £10,000 when most of the cheaper ones are around the £1k mark for example) to make sure they don't go with them, as they don't want that person as a customer. Maybe that's what the bank is doing? pricing you out to avoid lending to you at all.