Remortgaging and should I get my own valuation?

by Readers Question

9:48 AM, 11th September 2014
About 4 years ago

Remortgaging and should I get my own valuation?

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Remortgaging and should I get my own valuation?

I am new to property investing and I would appreciate some advise on remortgaging. I purchased my first BTL two months ago with a good discount.

I have just finished refurbishing it and I am planing to remortgage in 4 months to get back hopefully all the money which I invested. My question is – should I get the independednt RICS valuation before applying for remortgage? If I get the valuation now would it be taken into consideration in 4 months time by the lender?

Obviously the lender will instruct their own valuation when I apply for remortgage and I am wondering whether my independent valuation will have any impact, or if the lender will just stick to their own valuation report. My worry is that the property will not look as great as it looks now once tenants live there for couple of months and that can have negative impact on valuation done by the lender.

I would be grateful if somebody could advise me how to proceed to improve my chances for higher valuation when I apply for remortgage.

Thank you

Joanna

P.S. I just wanted to say thank you to the founder of this amazing forum and to people who dedicate their time to share their knowledge by responding to articles.valuation



Comments

Neil Patterson

10:03 AM, 11th September 2014
About 4 years ago

On behalf of the Property118 community I would like to thank you for your kind words.

You are quite correct that when you apply for your remortgage the lender will instruct their own mortgage valuation report. This report is paid for by you, but is carried out for the lender. The contract for the report is between the lender and the surveyor not the borrower.

So yes, if you pay for your own independent valuation this is then a report done for you personally and you may find this useful. However your report will not affect the new valuation carried out, or the lenders decision based on this new valuation.

If the mortgage valuation report comes up short compared to yours the only way of overturning it outside a 5% margin for error would be to provide comparables of identical properties in the same area and what they have actually sold for. Therefore your valuation would have little effect other that to give you a very good idea of what you would expect it to be valued at.

I hope that helps to inform your decision.

If you need any assistance with the remortgage just let me know npatterson@property118 as we have some fantastic Property118 broker sponsors and you will be helping the community as well as yourself 🙂

Recardo Knights

12:26 PM, 11th September 2014
About 4 years ago

I have found to my cost that a mortgage providers only lends on the valuation from the person they appoint.

I paid a survey fee of £350 to the mortgagee co expecting the property to be valued at £120-125k. I had offered £115k which was accepted. The valuation was done by a surveyor not local to the area, he valued it at £90k.. This was based on his information on the internet of sold prices of 5 years ago. Due to the downturn nothing much had sold in the last 3 to 5 years (East Anglia), the guy did not have a clue but it was no good arguing with the lender as they wanted me to prove the current value by showing similar properties sold for £115k in the last 3 months. Nothing similar or comparable had sold in the last 3 years. They accepted his estimate based on sold prices from years ago While ignoring 2 valuations from local estate agents.

They surveyor did not know anything about the property, when built, tenure etc. the inspection was a five minute walk round. His report said the address and nothing more. he thought it was built in the 1920's. It was in fact converted as a new build from an old car show room 10 years ago.

Also wanted a few years ago to do a remortage on a 5 bed property I had owned for 15 years, it was valued by a local agent and me at about £420k. The lenders valuer valued it at £320k, the average price of 3 bed houses in the locality.

Before applying and paying the lender a survey fee look on sold house prices in the street or area in the last 3 months. I look on Zoopla or Rightmove.

Expect the valuation from the lender to be at least 20% less then you expect it to be

I was able to give the lender all the information on the flat as I had managed it for the owner for the last 10 years. I also owned a flat in the building, one of four.

Paying for your own survey is of no value to you unless you have worries about the state/condition of the property. An independent valuation would be of no use to you, unless you were in doubt of its true value.

sheridan whiteside

16:34 PM, 12th September 2014
About 4 years ago

Reply to the comment left by "Recardo Knights" at "11/09/2014 - 12:26":

I had a 3 bed 1930s semi valued at £10,000 less than I paid for it six months previously when it was in a poor state.Upon investigation it came to light that the surveyor who was based 20 miles away did a drive by survey which meant he looked on zoopla and since my house was the only one sold on that street for 5 years, based his valuation on that, less a bit.and all for the modest fee of £400.00

Joanna Styrczula

20:03 PM, 12th September 2014
About 4 years ago

Reply to the comment left by "Neil Patterson" at "11/09/2014 - 10:03":

Thank you very much Neil for your advise. I will not get an independent valuation if it is not going to have any impact on lender's valuation.
So far there is just one similar house in the area sold in April which I hope I will be able to use as comparable and to persuade the lender to value my property at the same level.

Thank you
Joanna

Joanna Styrczula

20:11 PM, 12th September 2014
About 4 years ago

Reply to the comment left by "sheridan whiteside" at "12/09/2014 - 16:34":

Thanks Sheridan for your comment. Were you able to dispute this valuation and get it right? I was thinking that if I am in the same situation as you I will present before and after photos and the statement confirming how much I spent on renovation, but I don't know if this will work?

sheridan whiteside

21:54 PM, 12th September 2014
About 4 years ago

Reply to the comment left by "Joanna Styrczula" at "12/09/2014 - 20:11":

no unfortunately. I was asked by the mortgage company to list the improvements I'd carried out along with their cost and I also sent three written valuations from local estate agents and details of nearby two bed terraces which were priced higher than my 3 bed semi's valuation But after all that they chose to accept their surveyors valuation and the loan amount was £35,000 less than my total spend.My advice, be very careful what you spend and don't assume a surveyor will value accordingly,he might not even come and look

Nick Pope

10:36 AM, 13th September 2014
About 4 years ago

I won't attempt to answer some of the comments regarding surveyors though I do hear the sound of axes grinding!

Suffice to say I only do valuations in areas I know well (in some cases 40+ years) and rarely down value unless the evidence is overwhelming. Most valuers will not accept agents opinions as evidence as they will not be accepted by a judge and it is sometimes in court that these matters are decided. In addition we always need at least 3 good, local sales either exchanged or completed. Sales agreed are used but mainly as an indicator of market strength and direction to fine tune a figure.

May I suggest that if you are using a broker he can ask one of the larger firms of valuers to provide a desktop valuation. You will need to provide information on when the property was purchased, alterations/extensions made and any other changes in the property or the area such as new schools, improved transport facilities etc. The desktops I do are sometimes free or for a minimal cost (£20 ish). They give an indication of price band and whether the estimate is reasonable. The fee is often paid by the broker anyway so there may be no cost to you.

Nick

Barry Humphreys

15:38 PM, 13th September 2014
About 4 years ago

Nick is absolutely right about an Estate agents valuation, in fact unless the agent has Chartered status. An Estate agents valuation is Just an opinion and carries No legal status, that's why they should all be Regulated, it may tidy up some of the practices and tricks that some get up too. But apart from that the lender you go to will not only be interested in the property valuation but more importantly what the rental return is.
Joanna.
Before you go skipping off to the high street though find yourself an Independent Mortgage Broker who deals with "Whole of Market" and in particle a BTL specialist It may cost you a reasonable fee but well worth it.

Neil Robb

17:54 PM, 14th September 2014
About 4 years ago

I have a had similar situation. I have heard recently that Virgin has started to do same day mortgages again so you do not have to wait the 6 months for buy to let.

But you have to prove work done and varies other things.

My only compliant was the two Virgin valuation's seemed very low to me. I contacted estate agent who gave me 3 comparable all with in 1 mile of the property recently sold.

Plus I recently mortgaged two of my other properties with in 1 mile which where valued £30,000.00 more than the surveyor from Virgin did.

I appealed and wasted my time even with prove and other surveyor stating it was low they would not budge.

They did offer me a mortgage at the lower valuation I am still thinking about it but it was a waste of £500.00 between mortgage adviser and surveyor fees.

Barry Humphreys

11:40 AM, 15th September 2014
About 4 years ago

Neil. Go Back to your Mortgage broker and push him to search a different lenders, Virgin are not the only ones, or try using the lender you have for your other properties, the surveyor fees you may loos but your broker should Carrie on the search at least!! It's all about service to your client.


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