Massive LTV increase right before remortgage. Help!

mashmash90

I'm having a bit of a panic. We purchased our property in September at 505,000. The countrywide valuation was 500,000 at the time back in July. We remortgaged with Nationwide as we were able to port it over. My fixed rate is now coming to an end on 31 March. I have been logging in to check rates over that last few weeks and been waiting it out in case of a drop. Last week my LTV was showing as something like 75.12% on the mortgage manager nationwide app. I thought, great, as if next month I can pay off enough to drop it below 75 to get the better rates. Today I log in and it's saying my LTV is now 77.19. I'm in shock, it thinks our property is now worth 484,000. How would it have dropped that much. Is there anything I can do to still get a 75% LTV rate when I come to apply for a new product with Nationwide. I'm really shocked at this "drop in value" . I don't have enough saved up to get it down further by overpaying . We only bought 6 months ago so I'm not sure if moving to a new provider will be possible.

77588p

If you do a product switch via the advised service over the phone, they do allow a small Leeway. You can appeal the valuation but they usually want to see pictures of home improvements you have made.

Worst case scenario, move to a 2 year tracker with no early repayment charges and as soon as you hit an LTV with lower rates, fix in at that point. 

mashmash90

77588p said:

If you do a product switch via the advised service over the phone, they do allow a small Leeway. You can appeal the valuation but they usually want to see pictures of home improvements you have made.

Worst case scenario, move to a 2 year tracker with no early repayment charges and as soon as you hit an LTV with lower rates, fix in at that point. 

Thank you, I will try that. We haven't made any improvements yet other than basic redecorating in a couple rooms. We only bought it mid September. We aren't asking them to increase valuation from what we bought it though, they just seemed to have valued it at 20K less than we bought it for just 6 months ago.

kingstreet

The balance will be lower at the beginning of the month when you have made a payment, so that may help a little. Be careful going for a tracker now in the hope of a better LTV and rate. There is upward pressure on fixed rates as the swaps to fund them have increased.

Hoenir

General indications are that property prices are currently falling/softening as the impact of higher interest rates filters through. 

Did you negotiate the purchase price down significantly at the time of purchase. Valuer seems to have placed it at the the higher stamp duty cut-off level. 

jrawle

While it might be annoying, the difference will be, say, between a  rate of 4.69% and 5.02%. By my calculations, you will be paying over £2,200 per month, and the difference in rates will be of the order of £70. Is this extra really unaffordable?

fergie_

The most likely outcome is that the bank will offer to allow you to pay for them to send out a mortgage valuer.

This is very different to an estate agent etc as they are looking at what they expect the house to realistically sell for if it needed to be sold relatively quickly and if it is suitable security for the money that you are borrowing.

They could come back with a higher value, but it could also be lower still.

ReadySteadyPop

mashmash90 said:

I'm having a bit of a panic. We purchased our property in September at 505,000. The countrywide valuation was 500,000 at the time back in July. We remortgaged with Nationwide as we were able to port it over. My fixed rate is now coming to an end on 31 March. I have been logging in to check rates over that last few weeks and been waiting it out in case of a drop. Last week my LTV was showing as something like 75.12% on the mortgage manager nationwide app. I thought, great, as if next month I can pay off enough to drop it below 75 to get the better rates. Today I log in and it's saying my LTV is now 77.19. I'm in shock, it thinks our property is now worth 484,000. How would it have dropped that much. Is there anything I can do to still get a 75% LTV rate when I come to apply for a new product with Nationwide. I'm really shocked at this "drop in value" . I don't have enough saved up to get it down further by overpaying . We only bought 6 months ago so I'm not sure if moving to a new provider will be possible.

The drop in value is due to the pace of interest rate hikes, September was a strange time to pay over valuation as the direction of interest rates was pretty obvious by then?

mashmash90

ReadySteadyPop said:

mashmash90 said:

I'm having a bit of a panic. We purchased our property in September at 505,000. The countrywide valuation was 500,000 at the time back in July. We remortgaged with Nationwide as we were able to port it over. My fixed rate is now coming to an end on 31 March. I have been logging in to check rates over that last few weeks and been waiting it out in case of a drop. Last week my LTV was showing as something like 75.12% on the mortgage manager nationwide app. I thought, great, as if next month I can pay off enough to drop it below 75 to get the better rates. Today I log in and it's saying my LTV is now 77.19. I'm in shock, it thinks our property is now worth 484,000. How would it have dropped that much. Is there anything I can do to still get a 75% LTV rate when I come to apply for a new product with Nationwide. I'm really shocked at this "drop in value" . I don't have enough saved up to get it down further by overpaying . We only bought 6 months ago so I'm not sure if moving to a new provider will be possible.

The drop in value is due to the pace of interest rate hikes, September was a strange time to pay over valuation as the direction of interest rates was pretty obvious by then?

Our original offer was 12k above what we paid in the end. This is a 3 bed with a London postcode. 505k seemed like a very good deal at the time, there wasn't a lot on the market below that and we already sold our flat and has nowhere to live so 5 k above valuation wasn't worth losing a purchase overe

fergie_

The papers over the weekend had lots of stories about similar down valuations. Basically the valuers are now being overly cautious to protect themselves from the lenders.

mashmash90

Hi all, a positive update from me. I rang nationwide to appeal the valuation and within 2 days they emailed me to confirm they have adjusted it to the original valuation and it has brought me down below 75 LTV. Clearly it was a case of an automated system that didn't reflect real value. I wanted to share an update as I'm sure I won't be the only one who has experienced this and to not be discouraged from appealing if it happens to you.