House undervalued (first time buyer)

Al_Zombie

Hi all,
So I’ve had an offer accepted on a house. Mortgage approved and the surveyor has valued the house at £10k lower than the agreed price. £5k lower than the original asking price.

So they are now refusing to lend us the full amount required, and we don’t have a spare £10k cash to put towards the deposit.

This is Santander in Northern Ireland.

The advisor has suggested we get 2-3 different values completed to challenge it, but of course that will cost us each time.

Has anyone overcome anything like this without just paying the cash upfront?

I think it might be time to find a new lender and hope they’ll come back with a better valuation.

[Deleted User]

Or lower your offer.

Al_Zombie

Deleted_User wrote: »

Or lower your offer.

Of course, but there is a string of bidders with houses to sell and much larger deposits.

And an offer of £5k lower than the asking price would get laughed at.

G_M

Al_Zombie wrote: »

So I’ve had an offer accepted on a house. Mortgage approved and the surveyor has valued the house at £10k lower than the agreed price. £5k lower than the original asking price.

So they are now refusing to lend us the full amount required, .

So the mortgage is NOT approved!


You can either
* find the extra £10K
* reduce your offer by £10K and see if the seller willagree (or negotiate say, £5K)
* find a different lender and hope to get a different valuation
* find a different property


The most difficult option would be pursuading Santander to accept a different valuation.

Al_Zombie

Thanks, really just looking to know if someone has experience in challenging a valuation, and if it’s a worthwhile process.

TripleH

Not challenging a valuation, but when we were buying our flat, we received a preliminary mortgage offer then the Brexit vote took place and our bank asked us for a higher deposit.

With a little negotiation between us and the seller, we got the price reduced by about £5,000 but had to increase our deposit.

Do you have bank accounts with the organisation you are seeking a mortgage from?

jonnygee2

Thanks, really just looking to know if someone has experience in challenging a valuation, and if it’s a worthwhile process.

If you mean challenging Santander's valuation, it's not worth it. Even if you pay for three independent valuations, they all come back in your favour, the bank can still (and probably will) refuse to lend you anything.

G_M has outlined your viable options from this point.

Al_Zombie

TripleH wrote: »

Not challenging a valuation, but when we were buying our flat, we received a preliminary mortgage offer then the Brexit vote took place and our bank asked us for a higher deposit.

With a little negotiation between us and the seller, we got the price reduced by about £5,000 but had to increase our deposit.

Do you have bank accounts with the organisation you are seeking a mortgage from?

Thanks, the adviser did mention they might be knocking it down due to Brexit.

Yes I have banked with them since I was a kid. Abbey National/Santander

Crashy_Time

https://www.express.co.uk/news/world/1068783/eurozone-growth-forecast-EU-news-economic-crisis-financial-slowdown


Expect a LOT more caution from banks going forward.

TripleH

Al Zombie, that might partly be a problem.
When we bought, we knew we needed to do work on the flat before we could move in. We think our bank (who we have our mortgage with) decided that they would rather have the money we had set aside to refurbish the flat and used Brexit as a possible excuse to reduce the loan to equity value.

Bit late for you but for others reading, it might be worth setting up a savings account with a company seperate to where you intend to get a mortgage so they don't know how much spare cash you actually have.

bristolleedsfan

Al_Zombie wrote: »

And an offer of £5k lower than the asking price would get laughed at.

I offered 15000 less than asking price of 110000 and got the house for 100000 :j