Re mortgage valuation this week!

[413x]

It's probably still worth more than my valleys behemoth.

I'd love to see an analysis of build size over time. Gut feel is that took a dive in the 90s and got worse from there.

Would be really hard to get a representative view.
This house has a huge garden relative to house size for a new build. So very unusual. But house is very small.
In terms of generalisation.. All I can think of is small gardens and more uniform/clone builds.

Although my street were all build at same time there is some variety. New build estates seem to look more uniform now.

 

[bayo000]

Given some new builds have bedrooms that won't fit a bed, those descriptions aren't very helpful.

My house meets that description, but is huge compared to new builds.

I just checked 4 beds in my area on rightmove. None gave square footage and one didn't even give room measurements (what does "spacious" really mean?)

To be honest you get that with old houses as well. Our friends live two streets away, less than 2min walk. 4 bed, extension, 1 bathroom, drive, garden. Ours 4 bed, extension, 1 bathroom (plus downstairs loo and utility), drive, garden and garage. Both built in 1930s few years apart.

At the glance pretty much identical. Except ours is about 30% larger inside, yes our extension is larger but even the original rooms are bigger. Our drive and garden are more than twice their size. They can fit 2 cars now they tarmaced the whole drive, we could squeeze 5 if we park on the lawn otherwise 3 normal size cars.

 

[M1k3H]

What?

If you bought it at £100k with £10k deposit, you owe £90k

If your house is then later valued at £200k you don't then magically owe more money on your mortgage, you still owe £90k (assuming you hadn't paid anything off, unlikely I know).

But a 10k deposit on 100k house is 10%, whereas 10k deposit on a 200k house is 5% which might mean higher interest rate...

 

[jaybee]

You really want to have the lowest value possible for remortgaging, so I think you will only benefit from unfinished items. That is unless you want more money out of the bank.

Can you explain why you think having a lower value helps you with remortgaging?

 

[Mercenary Keyboard Warrior]

But a 10k deposit on 100k house is 10%, whereas 10k deposit on a 200k house is 5% which might mean higher interest rate...

Hes remortgaging
So say he had a 10% deposit on a £100k house, LTV 90%
Hes now got a £110k equity on a £200k house, 45% LTV

 

[baz178]

Bought house for 198k and had a deposit of 35k.

 

[M1k3H]

Hes remortgaging
So say he had a 10% deposit on a £100k house, LTV 90%
Hes now got a £110k equity on a £200k house, 45% LTV

I understand that. Without knowing the actual numbers though it could be that:
Originally 10% deposit on £100k house, LTV 90% --> Interest rate 10%
Now £30k equity on £200k house, LTV 85% ---> Interest rate 9%
Or £30k equity on a £150k house (cause valuation is lower) --> LTV 80% --> Interest rate 7%


So if you are close to the band it can make a difference.

 

[Mercenary Keyboard Warrior]

I understand that. Without knowing the actual numbers though it could be that:
Originally 10% deposit on £100k house, LTV 90% --> Interest rate 10%
Now £30k equity on £200k house, LTV 85% ---> Interest rate 9%
Or £30k equity on a £150k house (cause valuation is lower) --> LTV 80% --> Interest rate 7%


So if you are close to the band it can make a difference.

Which seems to disagree with your comments where you didn't seem to understand it.

Yeah but that's if you want to sell. If you don't what's the point other than paying more for your mortgage cause your LTV is higher?

People only tend to get a revaluation when they have done something significant. Such as building an extension with their own funds. So the price will move significantly.
Otherwise the lender will do a book valuation on remortgage which will apply average price change based on postcode (+ more depending on lender).

 

[M1k3H]

Which seems to disagree with your comments where you didn't seem to understand it.



People only tend to get a revaluation when they have done something significant. Such as building an extension with their own funds. So the price will move significantly.
Otherwise the lender will do a book valuation on remortgage which will apply average price change based on postcode (+ more depending on lender).

I either haven't explained it very well, or you can't read. My point was that the re-evaluation value can make a difference to people's mortgages, as it could drop them to a different band and affect the rate offered.

 

[jaybee]

You got it other way round

Say you have £20k equity in a property. If they value it at £100k you have 80% ltv ratio, if they value it at £200k you have 90% ltv.

No. You can't make up your own version of maths.

 

[Mercenary Keyboard Warrior]

I either haven't explained it very well, or you can't read. My point was that the re-evaluation value can make a difference to people's mortgages, as it could drop them to a different band and affect the rate offered.

Lol I suggest you re read your own post but again I will link it in case your struggling, I even highlight the main bit.

Apologies CBT for having to link your post that was replied to.

Errr

If they value it at 200k you then own '120k' of the value...

Yeah but that's if you want to sell. If you don't what's the point other than paying more for your mortgage cause your LTV is higher?

So how do you end up with an LTV that is higher if you have undertaken works that increase the value of your home?

 

[dlockers]

I either haven't explained it very well, or you can't read. My point was that the re-evaluation value can make a difference to people's mortgages, as it could drop them to a different band and affect the rate offered.

Only if they valued it at less fella.

 

[jigger]

Bought house for 198k and had a deposit of 35k.

Only potential issues are earnings and the property values in the area.

Had a pal who’s wife wanted to become a property developer. She went OTT on everything and ended up with a load of beautiful houses they rent at a loss.

 

[baz178]

Only potential issues are earnings and the property values in the area.

Had a pal whose wife wanted to become a property developer. She went OTT on everything and ended up with a load of beautiful houses they rent at a loss.

Value his good average selling his 265k but with the extensions I’ve put on hoping 300k.

 

[IvanDobskey]

It's all about current equity and value of the house. We bought ours three years ago for 320k with a mortgage of 85k so an LTV of 26%

But since then, we have paid off 55k and the house is valued by the lender at 385k. So LTV is now only 8%.

 

[413x]

I think last few posts have shown we need more basic/real world maths/financial education in school!

 

[IvanDobskey]

It's pretty simple really

What you owe the bank against the current value of the house.

 

[M1k3H]

Only if they valued it at less fella.

Yes.

Lol I suggest you re read your own post but again I will link it in case your struggling, I even highlight the main bit.

Apologies CBT for having to link your post that was replied to.




So how do you end up with an LTV that is higher if you have undertaken works that increase the value of your home?

The OP was worried that because the works were incomplete they could come back with a lower value. In that case they could end up with a higher LTV.

How much equity you own in the house is irrelevant, unless you are planning to sell.

 

[jaybee]

It's pretty simple really

What you owe the bank against the current value of the house.

And yet adults on a technical computer forum get it wrong. What hope has Debbie/Dave from the block got?

 

[fastwunz]

Part of how they value it.

@fastwunz does it for a living I believe he could tell you more than I can.

I just read the completed reports as part of what I do.

Yep when a surveyor visits your property to perform a mortgage valuation, there is a lot more involved than you may think. Measuring is important as the surveyor has to write a physical report after their visit comparing your property to others that have sold within a relevant distance that match the attributes of your property as closely as possible. This then allows the surveyor to come up with an accurate valuation of your property based specifically on comparable evidence - it has absolutely nothing to do with personal opinion and there is a high amount of detail involved. It is to the banks that the surveyors are ultimately responsible should they over value a property without sufficient comparable evidence to back it up. Ignore what an estate agent says - a surveyors valuation is based on specific and demonstrable market evidence and will provide the lender with a much more reasonable and technically true market value.

a lot of people are facing high interest rates at the moment and are trying to remortgage for as high a value as possible in order to lower their LTV - I’m afraid many are getting a bit of a reality check given what has happened with the market since good old Lizzy came along and completely wrecked it. Anyone who tries to market their house at 2022 prices needs a slap around the face with a wet kipper.