House valuation for remortgaging

[BookishKitten]

Hi,
MY OH and I will meet with a financial advisor to remortgage next week.

We've only been in the house we bought 3 years, and I'm not sure whether I have to have our house valued or not?

If so, how would I go about doing it? Any ideas?

There's still some projects we haven't finished yet in the house like tarting up the staircase (the whole house was a 1970s nightmare when we moved in...).
So if an estate agent comes over, do I have to do any work to the house beforehand? I mean actual work as opposed to cleaning and tidying up.

Thanks for your comments!

When I have done it, I have just had to provide my guesstimate and then I assume the valuer has either checked for comparables online or done a drive by. They haven't wanted access. At most you want to improve kerb appeal.

It’s not the estate agent who values it, it’s the mortgage company to say whether the value you want to mortgage for is accurate

You meet the broker, they recommend some mortgage companies, then the mortgage company agrees a time to come around. Sometimes they wanna see inside, other times they just drive past.

FWIW, it’s best to slightly over value than under. The mortgage company will never say it’s worth more than you think but may say it’s under.

You’re using a free broker right?

If staying with the same bank it will be a desktop valuation
Literally take the price you paid 3 years ago and multiply by how much prices in your area have gone up or down.
Nationwide calculator is probably the most accurate

Hi, everybody,

Thanks.

We might be changing banks, as we want to have the best possible deal on a fixed-rate for as long as we can (looks like it will be 5 year fixed rate, as our LTV is approx 78%).

We're using a free mortgage broker and they've asked us to fill this online form which requires us to say how much the house is valued at.

Prices in our area have gone down a bit (we're in the SE commuter belt to London and Reading), but we actually spruced up the house and redid the bathroom since we bought it.

What is the advantage of saying that the house is worth more than it is? And what's the downside if the value of the house has gone down slightly?

For example, if we had paid 500k for the house, with a 50K deposit. Then spent some money doing it up (15K), and had paid off about 20K off the loan of 450K.
When remortgaging should we say the house is worth approx. 400K (based on lowering prices in the area) ? Or keep to 500K? Or go slightly over and say 510K?

Should we also just ask for the outstanding amount on the loan, i.e. 450K in the example I gave, or use this as an opportunity to do some work to the house?
I'm not keep on borrowing, but savings rates are laughable and as it happens we wanted to do some work on the garden (it's dangerous at the moment) and quotes have come in at around 6K. WWYD?

What is the advantage of saying that the house is worth more than it is? And what's the downside if the value of the house has gone down slightly?

Because the mortgage provider will never over value for you.

I recently remortgaged an investment flat and the numbers were as follows:

• bought for £340k 5 years ago
• had it valued with an estate agent 2 years ago and was told it’s worth £450k+
• remortgaged and gave the value at £440k to allow for a potential fall
• first mortgage company valued it at £420k, second one valued it at £440k.

Neither of them would have valued more than I said, my mortgage broker told me.

I’m not an expert but I can’t quite believe your house will have dropped by £100k in value since you bought it 3 years ago?
I’d put it as more than you bought it for tbh, the work will have added value to it and I can’t believe it will have dropped in value by that much.

Then it’s totally up to you as to how you finance additional projects. But borrowing money on a mortgage is quite an expensive way of doing it.

our LTV is approx 78%

How are you calculating this? Based on your original purchase price? Either use this as a starting point or increase the value to see what would get you to 75% LTV as you'd get access to better deals.

Tbh though your mortgage broker should go through all this with you in person so don’t worry too much about having all the answers now

We went through this recently. I looked at the estimate on Zoopla and went with that. You can also add in info on Zoopla to get the estimate up based on work you've done.

Then the bank sent their valued who put it as wayyyy less. Upsetting as we are taking out equity to extend, but nothing we could do.

We did the zoopla thing too, but our mortgage providers thought it had increased in value too much since we had bought it to be accurate. They sent out their valuer, who criticised every element of the house to my husband as he showed him round (we feared the worst), then he said the zoopla estimate was correct and our LTV ratio went from 85 to 65%.

I think it depends where you live, Zoopla is laughably incorrect here so I'd never dream of referring to Zoopla for something important. Are there any houses similar to yours on the same road that have sold recently? Any up for sale? I agree that the Nationwide House Price calculator is a decent guide albeit it doesnt drill down beyond region.

Hi, I thought it would good to post an update and to thank everyone again for their advice and comments.
It turns out that Zoopla was totally wrong. Not only has our home not devalued, it’s actually went up by about 25k. This was based on the lender’s own assessment.

With this in mind our LTV dropped quite considerably and we ended up going for a fixed rate deal for 5 years with Virgin Money for a variety of reasons like portability, payment holidays if needed, lower early repayment charges, etc.

Deep down I wish we’d gone for a higher loan to do a downstairs extension, but with so much Brexit instability that would just drive my anxiety levels through the roof. DH and I have very specialised jobs and worry about elbow economic impact this will have...
Thanks everyone!