Mortgage/Valuation issue

[Tysonator]

I had exactly the same problem but with a developer. I risked it and said I was pulling out unless they accepted a revised offer inline with the valuation.

They did.

And please remember, it's a risk. The estate agent doesn't work for you, they work for the vendor. If the vendor pulls it, you're shafted.

Oh, and if you have your head screwed on, there is absolutely nothing wrong with an interest only mortgage. They can often work in peoples favour. Friend of mine is in IO flat and he will just rent it out when he moves to somewhere else. He can then choose to change to CR or keep it IO, the value of the flat will only go up at some point and he can then sell it, pay off his mortgage and pocket the rest (although the difference would be more if he was paying CR obviously).

I know a GP who is paying IO, married with 4 kids and who lives in Sandbanks, the most expensive property in the UK. Once al his kids have left home he will simply sell the house, pay off the mortgage and move to something smaller with his wife. Simples

Now that's what I am talking about, selling with the intent of not staying there long term. Of course the risk is the rise or fall of property prices, and at some point like the GP at Sandbanks. You will have to buy smaller from the equity gain on IO property.
If not as time ticks on and you keep moving up the ladder, you still have to pay that capital off.
If it is for retiring, then you may have a slight problem with not enough equity to live on. So a real big down sizing may be required.

If Ihad to do this whole mortgage debt process again, Ii would have IO on my 1st, perhaps 2nd propert ( so the 1st 10-15 years on the ladder ) then on the next property option for IO then starting paying of Capital chunks. AS buy this time in life you should have the money to do so. Unless you lots of childern or addicted to crack cocain !

 

[toshj]

slight update: we had the valuation report sent through. it had been valued as such because:

- its surrounded by both residential and commercial properties

- its above a commercial premises (the 8 units in the warehouse are live/work units, and the bottom floor is an art studio). this will affect future marketability

- it has a flat roof, and that its likely we'll either have to pay for repairs or a new roof at some point

- there are no comparable places around in the area at the same price

the estate agents have somehow found the surveyor's email address and have sent him an unofficial revaluation request (doubt this is a good idea) by providing a couple of others places in the local area that have sold for similar amounts. they're kinda clutching at straws here, as one of the properties is miles away!

should be interesting to see how this unfolds. after speaking with our mortgage advisor he insisted that if things shot up and we were at a 6% level we'd be paying £1,900 per month - and that's if we decided to stay on with our current mortgage provider at the end of the two year fixed. this would work out as the three of us each paying £635 per month, which is again not too bad for London.

as always, please feel free to correct me on anything I've missed

 

[Slam62]

it never ceases to amaze me at the lengths people will go to to make a really bad move.

do yourself a favour, walk away.

can't you see what a mess this whole thing is, it's too complicated.

take a look at the news, sentiment is not going to get better.

the banks and much of the city may have to go the way of B.L.

 

[kwerk]

Also, the guy I'm buying the place with is on £18,000 salary (his parents are paying his deposit)

Surely you missed an extra zero on the end when typing this?