Additional Borrowing - Survey Result didn't provide a valuation

rtid2

Hi all. I applied for some additional borrowing on my property.

The lending criteria was all good. The bank (NatWest) then asked for a physical survey by L&G Surveys. 

The survey refused to provide a valuation as the property is a flat above a restaurant. I fully understand this is high risk, but surely the property still has a market value.

I asked the mortgage broker (works at Natwest not an independent one) what they can do about it. She said that the survery confirmed the flat can't be used as security.

However I have an existing mortgage so this is strange. 

I am accepting defeat with NatWest, but I am frustrated its failed at this hurdle.

I was curious if others have experienced this and now I am wary what will happen when I come to remortgage in 2 years. Will this failed mortgage impact my current one in the future?

user1977

rtid2 said:

Will this failed mortgage impact my current one in the future?

Not directly, but other lenders will have similar criteria for what sort of property they accept.

Yes, it has a market value, but it's normal for the value to be "zero" for mortgage purposes if it doesn't match the lender's criteria. I can understand why they don't want to risk more money on it.

rtid2

I agree its Natwests decision if they don't want to lend more. In this case Natwest are saying the surveyors won't provide a value so Natwest can't progress. The Surveyors don't know the mortgage amount or value. The property still has a market value surely which is all the surveyors have been asked to do? 

MWT

rtid2 said:

I agree its Natwests decision if they don't want to lend more. In this case Natwest are saying the surveyors won't provide a value so Natwest can't progress. The Surveyors don't know the mortgage amount or value. The property still has a market value surely which is all the surveyors have been asked to do? 

They will be following the lenders criteria, so first it must pass that test, then they get to the valuation.

If you fail the criteria check then there is no valuation.

Have their been any recent sales of similarly located flats?

This is from the NatWest criteria:

"In all the examples below the valuer must confirm saleability and suitability for mortgage purposes, if they can then we can consider lending against the following"

It feels like the valuer formed the opinion that they could not provide that assurance.

rtid2

thats MWT. I guess its the criteria where it falls down.

I will need to hope this doesn't impact my ability to remortgage in the future.

MWT

rtid2 said:

I will need to hope this doesn't impact my ability to remortgage in the future.

It will not affect your ability to select another product from your current lender if you wish to renew a fix, but it is something that will matter if you want to remortgage to a different lender, so use a good broker and warn them about this aspect at the time.

kingstreet

Did no-one advise you about the limited lender options existing in the market for flats above commercial property and particularly above hot-food outlets when you purchased?