Early Redemption Penalties

DaveTrumpet955

I wanted to port my mortgage with my existing lender, which they were happy to do, the valuation carried out by one of their panel of valuers for our new home came in at £90k under the asking price. Ive since had two further valuations and both came in at the new house asking price. I know that Im paying a premium for a new house, but not £90ks worth.

Im now due to complete with another lender in the next month any ideas how I can get my current lender to drop the £6k ERP, other than asking nicely??

Any help appreciated!

UK007BullDog

They are not going to. Full stop. And you will not be able to reclaim them either. You are breaking the contract.

Why in the world would you want to pay more for a house than it is worth in a falling house price climate???????????

Tiddler_2

They are unlikely to drop the early repayment charge at all.

If you wanted to stay with the current lender, I would have sent them a copy of the other valuations you have had carried out, and asked their valuer to reconsider his valuation.

A down valuation of £90k is hell of alot.

_Andy_

DaveTrumpet955 wrote: »

I wanted to port my mortgage with my existing lender, which they were happy to do, the valuation carried out by one of their panel of valuers for our new home came in at £90k under the asking price. Ive since had two further valuations and both came in at the new house asking price. I know that Im paying a premium for a new house, but not £90ks worth.

Im now due to complete with another lender in the next month any ideas how I can get my current lender to drop the £6k ERP, other than asking nicely??

Any help appreciated!

Asking nicely isn't going do change the T&Cs you agreed to.

UK007BullDog

Tiddler wrote: »

If you wanted to stay with the current lender, I would have sent them a copy of the other valuations you have had carried out, and asked their valuer to reconsider his valuation.

The valuer will not do it because if he does and the house price falls further and the bank has to repossess the house and its worth less than what he said he is in the poo. So they will not in todays market even entertain the idea.

I personally would not pay more than what that surveyor came up with unless he is a total dimwit. But with the falling market I would be very careful.

chappers

Who is your current lender ?
How much have each of the valuers valued the house at.
A £90K downward spread means that somebody isn't doing their job right, who did the other two valuations, surveyors or EAs ?

Tiddler_2

I know valuers have to cover their behinds but they do get things wrong. After all a valuation is just his/her opinion, otherwise all the valuers would have come up with the same figure. The valuers who have valued it at the purchase price must have had some comparable figures to justify their valuation.

A £90k downvaluation is hell of a lot, unless you are buying a very high priced property. Is it a new build property you are buying?

It does seem that the OP is looking to continue with the purchase, and I was just suggesting what he could do to try and save his £6k ERCs. If you don't ask, you'll never know!!

DaveTrumpet955

Thanks to those who posted positive/helpful responses

House is new build 5 bed detached sale price of £390k, two valuations have come in at £390k, original valuation came in at £300K, whilst I can accept a fluctuation of 5 - 10%, nearly 25% is not something I can pull out of my back pocket.

I dont believe the original valuation was undertaken with any form of comparison of other similar detached properties in the surrounding area or within a defined radius. As this is a new build and a new development of some 500+ houses, there are no 5 bed house in the imeadiate vicinity. Ive done a search for new build properties within 5 - 10 radius of my new house and the average figure is coming in above £360k??

The valuations were all carried out before the credit crunch hit, its just taken this long to get to completion. I wanted to stay with my current lender, but was unable to stay due to the funding gap.

_Andy_

Hi Dave

The new build average figure you mention - is that actual sale prices or prices that they're on the market for?

DaveTrumpet955

Andy

Thats the price there up for sale, but as they are all new build I cant see there being much negotiating space

_Andy_

Hi

Reason I ask is a valuer will usually use comparables for actual sold prices as well, so might be worth checking what prices recently built ones are going for (if there have been any sold of late).

Cheers