Will my remortgage now be a problem

Newheight13

My property was up for sale and we had 6+ offers for 225k but after 2 valuations, it came back as 180k both times! They said they think this so down to a couple of run down properties in the block went for 160k in recent months. My mortgage is for 170k so will I now  have issues when I come to reportage in a couple of months? 

Thanks  

ReadySteadyPop

The main issue could be higher mortgage rates are now expected but it doesn`t sound like you will be in negative equity.

RogerPensionGuy

Newheight13 said:

My property was up for sale and we had 6+ offers for 225k but after 2 valuations, it came back as 180k both times! They said they think this so down to a couple of run down properties in the block went for 160k in recent months. My mortgage is for 170k so will I now  have issues when I come to reportage in a couple of months? 

Thanks  

Can't any of the 6+ buyers just buy it?

How much did you pay for property, when and mortgage to loan when you purchased it.

Valuations can often give low valuations and 180 verses 225 X 6+ does appear very low. 

ReadySteadyPop

The valuation is still more than they paid so is not that bad, strange that 6 people offered the same though?

Newheight13

We paid 180k 4 years ago, all estate agents valuation came back with offers over 215k and then we had a mixture of offers ranging from 223k to to 225k as we know they are in high demand. Sadly no cash buyers but frustrating that so many people want them at that price! They are flats but they are on one of the most expensive quiet streets in the city and overlook the city too. They’ve even been renovated to a very high standard so the surveyors have got to wrong, but I know an appeal is just not worth it. 

eddddy

Newheight13 said:

My mortgage is for 170k so will I now  have issues when I come to reportage in a couple of months? 

If you change to a new mortgage product (with a lower rate) from your existing lender, there is unlikely to be a problem. They wouldn't do a new valuation.


If you want to change mortgage lender (to get a lower rate), the new lender will almost certainly do a valuation - either a desktop valuation, or sending a valuer to value your property.

If the valuation comes back at £180k, and you want to borrow £170k - the lender will treat that as 94.4% Loan to value.

You might find it difficult to find a lender who would offer a 95% LTV remortgage.

[Deleted User]

Maybe the bank valuation isn't so wide of the mark. If I can buy a run down version for 160k, and spend 20k refurbishing, do I not have the equivalent of your apartment, give or take? Put another way, was the valuer expected to take the sold price of a run down unit 160k and assume that it would take £65k to refurbish to a market value of 225k. After all we are talking about an apartment, not a whole house.

Option 1 - take the price down to 215k and pray that amongst interested parties is a cash buyer landlord. I got full asking but sold my let property townhouse that way.

Option 2 - reduce to  say 199k and hope that someone is prepared to fund the difference from a larger deposit. Go back to the previous bidders.

Regrettably I imagine that the value of apartments is viewed with great caution by surveyors these days.

RogerPensionGuy

If selling is what you want. 

Just find the one the 6+ people wanting it that can pay the most.

Hopefully one person who offered will have sufficient deposit for a mortgage company to provide the money. 

However even if a buyer has a 25% deposit(of 225K) the mortgage company will feel likely it's a 100% LTV and the rate will be high.

Sounds like a mortgage of 150K would be a reasonable deal, so buyer needs a deposit of the difference between 150K and sale price.

Is property fully owned or part buy/part rent variety? 

Newheight13

Thank you for all the replies. What you’ve suggested is kind of what the EA has suggested. Everyone other house in the street cost at least one million so the lenders have this wrong I think. They also have garages and a balcony!  They are owned but on a lease, which we’ve already paid to extend. 

Maybe it’s worth appealing it when we have 12 separate buyers all wanting them for the same price. The estate agent said he can’t believe  how wrong they have valued these, but they would I guess.

RogerPensionGuy

Maybe I'm confused as I normally am. 

12 buyers happy to essentially pay 225K, but valuation 180K.

Other properties there around 1M.

Is sound strange or most liklihood I'm confused. 

ReadySteadyPop

Newheight13 said:

We paid 180k 4 years ago, all estate agents valuation came back with offers over 215k and then we had a mixture of offers ranging from 223k to to 225k as we know they are in high demand. Sadly no cash buyers but frustrating that so many people want them at that price! They are flats but they are on one of the most expensive quiet streets in the city and overlook the city too. They’ve even been renovated to a very high standard so the surveyors have got to wrong, but I know an appeal is just not worth it. 

EA valuations are mainly aimed at getting your business in my opinion, cash buyers can tend to be more cautious and maybe more informed about the market, they will tend to haggle more than a FTB who just wants to secure a property. Lender valuations are all that count if people are using borrowed money to buy your house.