Remortgaging question

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OpenToSuggestions

OpenToSuggestions

Soldato
Joined
5 Aug 2006
Posts
11,375
Location
Derbyshire
Hey all.

I bought a house in May, 90% loan to value and fixed for 2 years.
Currently I am trying my hardest to overpay, and am doing so by a little over 10%. The reason for this is so that when the 2 year fixed is up, I will (according to mortgage calculators) owe 85%, so will get a better interest rate.

However...

I bought the house for around 12-14% under actual value, as the previous owner needed a quick sale, so when I remortgage I will own a far larger amount as the property is worth a lot more.
Is the above sentence true? I am struggling to overpay and am going without other stuff in my life to do so, which I don't mind too much but perhaps I don't need to :p.

Many thanks.
 
I wouldn't have thought theoretical value matters. Surely everything is in the context of the sale value? When you got your 90% LTV they didn't say "ah, but you got ~12% off the 'real' value so your LTV is only 88%", did they?!
 
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Amleto said:
I wouldn't have thought theoretical value matters. Surely everything is in the context of the sale value? When you got your 90% LTV they didn't say "ah, but you got ~12% off the 'real' value so your LTV is only 88%", did they?!
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I agree, but if I went to another bank they would need to revalue the property first?
It must work the other way too - I could have bought it in 2007 on a 5 year fixed deal, before the value took a nose dive.
 
My boss negotiated on the value when re-mortgaging, using Zoopla to backup his argument. It was done however on the value of his own property compared to the market trend in that time.
 
They'll want an up to date valuation, which you may or may not agree with. It could have been many years since it was valued and extra works carried out, windows etc could have been fitted. What you paid is irrelevant to their LTV calculation. Guess they'll want the outstanding balance inc redemption as well.
 
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Unless you pay to have it revalued :)
Spoke to Natwest about this recently as the recent sales in our area have been 20-30k more than we paid 2 years back, its looking good.

Got new double glazing goin in next week, a new kitchen adn real wood floors, a spodge of paint around the place adn downsstiars is done. Upstairs were redoing the bathroom, making it larger and adding a shower and redecorating all rooms.

Hopefully can get it revalued at a large portion above what we paid, 165k would mean our mortgage goes from 690 to about 500 or 440 and add a few years on mortgage, or 600 and cut a fair few years off the mortgage!
 
~Divine~Wind~ said:
Hopefully can get it revalued at a large portion above what we paid, 165k would mean our mortgage goes from 690 to about 500 or 440 and add a few years on mortgage, or 600 and cut a fair few years off the mortgage!
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Keep the repayments in line with your salary and pay it off even earlier with no additional hardship on your part. :)
 
They would revalue the house, the price you paid is of no interest them as their liability will be based on the current market value. They want to know how much the asset is worth to make sure they can reclaim their money back should you not keep up your payments and they have to seize the asset.

Don't forget that valuations are always on the conservative side.
 
It will be revalued; however when you say you paid 12-14% under the "actual value" that doesn't necessarily mean the house will be valued at that level plus whatever changes have happened over the two years. They may not agree with your "actual value", even if it is based on previous valuations.
 
Trifid said:
Keep the repayments in line with your salary and pay it off even earlier with no additional hardship on your part. :)
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Yeah the 600 option was looking best, pay off earlier and save 100 a month, think that was cutting off nigh on 8years from the length of the mortgage
 
How long does everyone generally fix there mortgage for ?

We are 3 months in to our first ever mortgage and we have it fixed for 2 years
 
DogsBody said:
How long does everyone generally fix there mortgage for ?

We are 3 months in to our first ever mortgage and we have it fixed for 2 years
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Fixed for 2 years only because we will drop down to the next LTV level when it comes to renew. I don't think rates will change much over the next 2 years either.
 
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