Mis-sold mortgage. House Price Index (HPI)

PaoloWilko

Hello everyone,
I have been trying to find some information about the use of House Price Index (HPI) and that it was used to calculate the Loan to Value amount and whether it is grossly incorrect.
Brief overview.
Took out a joint mortgage (remortgage) with my partner with Natwest in November 2018.
Previously had a mortgage with Natwest prior with same house. The house was previously valued at around £325,000-£350,000 on taking out first mortgage in 2015.
At the time of applying for joint mortage in 2018 the mortage advisor based at the branch informed us that we would not need a valuation done on the property.
The issue I now see is that we did, inform the advisor that that there had been an extension on the house which had resulted in the value of the property becoming £535,00-£575,00 in value based on 3 estate agent valuations. 
We potentially are looking at additional borrowing this year.

My questions are:
Have we been mis-sold a mortgage by Natwest based on them not valuing the property correctly?
Has this resulted in us paying more in interest as the loan to value calculator came at 70% based on mortgage of £264,000 (I calculate the loan to value would be more like 49%)?
Where do I stand legally and would I be entitled to any compensation if I have been mis-sold a product?
I feel this has potentially resulted in us paying an incorrect interest based on the loan to value bands?
I have not contacted Natwest yet, as I wanted to get further information on where I stood before hand.
Any help would be greatly appreciated.
Thank You everyone in advance
Paul

jenni_fer

What was the max LTV on the product you were offered? And the next band down? Would you not have noticed at the time that the rate they were offering you was not the one you were expecting?
HPI based valuations would be used if they are happy you easily fit into the LTV banding, if you were borderline or claiming that your property was worth far more than that figure then they would usually do a proper valuation if it would have any impact of the product offering.
My guess is that you signed to say you were happy with the product you had been offered and should have raised any issues at that point but I'm not an expert.

csgohan4

what makes you think that EA are more qualified in valuations than compared to a RICS valuation?
The time to dispute this was before you agreed to it. 
Spending X on your house, doesn't always improve it by X

PaoloWilko

jenni_fer said:

What was the max LTV on the product you were offered? And the next band down? Would you not have noticed at the time that the rate they were offering you was not the one you were expecting?
HPI based valuations would be used if they are happy you easily fit into the LTV banding, if you were borderline or claiming that your property was worth far more than that figure then they would usually do a proper valuation if it would have any impact of the product offering.
My guess is that you signed to say you were happy with the product you had been offered and should have raised any issues at that point but I'm not an expert.

Thanks Jennifer for your response,  I do not recall them going through the bandings  nor what their max LTV product was compared to others, only the amount we could borrow the affordability and whether it was a fix/variable rate and 2/3/5 years was talked through.? Your right at the time I was happy with the perceived product and we signed based on the fact they said we didn't need a valuation and it was the best deal they could offer. (Played?)  I had a very poor credit rating and account conduct history historically.  In hindsight should I have sort independent advice?  Despite having a mortgage before, I still was not that familiar with the loan to value aspect of it or the significance I was just happy I could get a mortgage!

PaoloWilko

csgohan4 said:

what makes you think that EA are more qualified in valuations than compared to a RICS valuation?
The time to dispute this was before you agreed to it. 
Spending X on your house, doesn't always improve it by X

Thanks for your response csgohan4, as mentioned in my response above there we're a few things in hindsight that I believe were not discussed. However I wasn't as au fait with certain areas such as LTV Banding, i did speak to a mortgage broker too on numerous occassions and banding was not mentioned.  I would expect a bank to be honest and upfront!?  I did discuss and challenge with the advisor the fact the extension floorprint had doubled in size and doubled the amount of bedrooms, reception and bathrooms in along with other aspects. I never said that an estate agent was more qualified then RICS valuation but a considerable two story extension would add considerable value to a property. At the time I accepted the bank had managed to sort a good deal for us considering my credit history and in trust that they had gone through the process in the interests of my position as well as their own. Naive maybe.

dunstonh

Have we been mis-sold a mortgage by Natwest based on them not valuing the property correctly?

No.  A valuation is just an opinion of an individual or software at the point it is done.   You are free to contest the valuation before the mortgage is advanced.

In hindsight should I have sort independent advice?

Almost certainly.  A broker would not just have looked at retention deals (i.e. those from the existing lender) but also across the market.   Generally, brokers are more forthcoming in providing you information and working harder for you.

The issue I now see is that we did, inform the advisor that that there had been an extension on the house which had resulted in the value of the property becoming £535,00-£575,00 in value based on 3 estate agent valuations.

Estate agents value property for sale with around a 10-15% increase over what they expect it to sell for.  

ACG

The time to dispute the valuation was at the time of application. 
The problem is, you would have had to pay for the valuation (around £300-400 at a guess) if you were unhappy with the desktop valuation. 

Could you have got a better deal with Natwest? Probably, but it would have cost you a valuation fee. 
Could you have got a better deal elsewhere? Probably, but you would have had to go through a full application which you could have done, but Natwest can not advise you to go elsewhere. 
Have you been miss sold? No. You could have raised your concerns at the time but you didnt. 

In any event, Natwest can only recommend their own products and this valuation would have stuck regardless of which product you went for unless you opted to pay for the physical valuation. 

PaoloWilko

Thanks everyone for your thoughts. Much appreciated. No substitute for experience and learning from past experiences. I did think it was highly unlikely there would be any viable reason to persue and this has saved time and effort. Thanks again.