Mortgage : Lender down valued a huge amount, advice.

[dhutch]

sc0tt said:

Can we have a link to the property?

I've held off that while everything is still up in the air, impossible to know who is watching the thread or tracking traffic to the listing and while the risk is low i don't want to add to that.

I can PM the link to individuals, but will also post it publicly once we have confirmation where we are with this.

Thanks Daniel

[Fastpedeller]

dhutch said:

Fastpedeller said:

Market about to plummet??

Is it? Interest rates may move up, which might trigger a wobble, but would also make the mortgage more difficult. Unless you know more than me? Which is quite possible.

No just my speculation (hence the '??'). When I bought my first property in '89 they valued it a bit lower, and next think we had further interest rate rises and the property crash/negative equity of some 25-30%. Interestingly when I was setting up the mortgage they said "lets see if you can afford it if the rate goes up" ...... you've guessed it, and I reckon they had prior knowledge. Public are being played for mugs.

[p1doc]

supposed to be interest rate rise this month but can only see that being 0.5% at most should not cause any probs with mortgage
however market value can go up and down in no relation to interest rates so hard to predict

[dhutch]

Always. In 2011 I took out a tracker, which has been great up to now, very happy. But for this we have opted for a 5yr fixed given the current state of the nation, by 2023 hopefully we will have made a reasonable dent on it and maybe even for the world to have found its feet again.

Mortgage offer arrived in my email just, hard copy in the post to the solicitor in told.

Daniel

[DonkeyApple]

Fastpedeller said:

No just my speculation (hence the '??'). When I bought my first property in '89 they valued it a bit lower, and next think we had further interest rate rises and the property crash/negative equity of some 25-30%. Interestingly when I was setting up the mortgage they said "lets see if you can afford it if the rate goes up" ...... you've guessed it, and I reckon they had prior knowledge. Public are being played for mugs.

I think that all you need to do is write down all the economic events expected over the next few years that will push prices up such as wage inflation, strong economic growth, large inflows of capital, successful Brexit, London continuing to climb well, happy population, plenty of remaining capacity to borrow, falling or low interest rates, strong corporate earnings, deregulation/loosening of lending criteria, strong BTL growth, strong immigration etc etc and then cross off the ones that you don’t think are going to happen and have a see what’s left to keep driving prices up nicely.

[Fastpedeller]

DonkeyApple said:

Fastpedeller said:

No just my speculation (hence the '??'). When I bought my first property in '89 they valued it a bit lower, and next think we had further interest rate rises and the property crash/negative equity of some 25-30%. Interestingly when I was setting up the mortgage they said "lets see if you can afford it if the rate goes up" ...... you've guessed it, and I reckon they had prior knowledge. Public are being played for mugs.

I think that all you need to do is write down all the economic events expected over the next few years that will push prices up such as wage inflation, strong economic growth, large inflows of capital, successful Brexit, London continuing to climb well, happy population, plenty of remaining capacity to borrow, falling or low interest rates, strong corporate earnings, deregulation/loosening of lending criteria, strong BTL growth, strong immigration etc etc and then cross off the ones that you don’t think are going to happen and have a see what’s left to keep driving prices up nicely.

Why is driving prices up 'nicely'? There are only 3 groups of people that helps - the banks, the legal/estate agents, and the speculators. The avaerage man doesn't gain in real terms.

[dhutch]

Yeah, so in summary, significant growth in house prices is not expected. Nor is a big crash.

Time will tell I guess, but we like the house, location, plot size, money stacks up well in the mid and long term and will be ok short term.

Daniel

[NickCQ]

Fastpedeller said:

Interestingly when I was setting up the mortgage they said "lets see if you can afford it if the rate goes up" ...... you've guessed it, and I reckon they had prior knowledge. Public are being played for mugs.

[WhiskyDisco]

OP, I have always been told to buy a house with your head, and not your heart. My two houses prior to our current I didn't really want to buy, but turned out well in the end. In each case I've thought that I was paying over the odds, in a market that was due for a fall. In my state of mind at the time, if the valuation for those properties had come in at below what I had offered I wouldn't have needed an excuse to pull out - the lack of funding would have been my excuse.

I would be tempted to either walk away, or revise my offer to the valuation amount. What other choice would I, or the lender have? (I'm not convinced that the Natwest 100% mortgage will materialise).

On another note, regarding surveys I once bought a property at an auction, where the terms were 10% down, completion in 28 days time. I lined up a mortgage agreement in principle and arranged the survey on the 3rd or 4th day in. The survey came back with: damp, dodgy electrics (exposed cables), dodgy plumbing (shrubs growing in the drainage) and subsidence (the garage had shallow foundations and a crack in the wall). The survey came back with 'unable to value the property'. I didn't want to buy the property but had to as I had committed to - so begged & borrowed the money to settle within 28 days. It all turned out in the end but if I could have done, I would have walked.

[dhutch]

WhiskyDisco said:

OP, I have always been told to buy a house with your head, and not your heart.

Yeah, I mean certainly it's too big a purchase to wing it. Not only does the house appeal to our hearts as a nice house, it also ticks the boxes for what we want in a house. Rooms, sizes, location, garage, plot, access to motorway, commute, etc. in a way which others do not.

Daniel

[WhiskyDisco]

I do understand. It's just the valuation that set alarm bells ringing. If it weren't for that it would be a no brainer (a.k.a. all heart!)

[dhutch]

WhiskyDisco said:

I do understand. It's just the valuation that set alarm bells ringing. If it weren't for that it would be a no brainer (a.k.a. all heart!)

If it weren't for the first low mortgage valuation it would be absolutely perfect for both head and heart.

The homebuyers is on the money, as is the second mortgage valuation with the second lender.

Mehahhh


Daniel

[ooid]

WhiskyDisco said:

I do understand. It's just the valuation that set alarm bells ringing. If it weren't for that it would be a no brainer (a.k.a. all heart!)

Well, they are not always correct. To be honest, OP, I think your real estate agent and surveyor needs to sort this out. Firstly, real estate company should have agreed on the asking price, making sure that they have the full research on pricing. It's either they could not do their research, or something wrong with the valuation, so needs to be sorted by both ends.

[Mortgage_tom]

DonkeyApple said:

I think that all you need to do is write down all the economic events expected over the next few years that will push prices up such as wage inflation, strong economic growth, large inflows of capital, successful Brexit, London continuing to climb well, happy population, plenty of remaining capacity to borrow, falling or low interest rates, strong corporate earnings, deregulation/loosening of lending criteria, strong BTL growth, strong immigration etc etc and then cross off the ones that you don’t think are going to happen and have a see what’s left to keep driving prices up nicely.

[dhutch]

ooid said:

Well, they are not always correct.
... OP, I think your estate agent and surveyor needs to sort this out. ..... It's either they could not do their research, or something wrong with the valuation....

I think that is fair enough in general. And I would agree that the estate agent leaves much to be desired, they are a bit of a 'pile it high sell it cheap' outlet and don't have the man power to look into the valuation for us at all.

However on the flip side, with two of three valuations valuing up (home buyers and second lender valuation) they are just going to say the one low valuation (first lender) is wrong. I cant as such fault that, and its what I would be saying to myself if I was the vendor too, assuming there is not past history of low valuations on the property.

Very hard to know, As said, assuming other potential buyers are not going to have more issues than otherwise expected normal, the house is a fair buy at the price we originally offered and have reverted to now.

Currently waiting for the solicitors copy of the mortgage offer to arrive with them in the post, send first class on Tuesday, didn't arrive today. Apparently they always go out, but Accord don't email them and the copy I have isn't the same as the sols get. Sigh.


Daniel

[TonyRPH]

dhutch said:

I think that is fair enough in general. And I would agree that the estate agent leaves much to be desired, they are a bit of a 'pile it high sell it cheap' outlet and don't have the man power to look into the valuation for us at all.<snip>

If your estate agent was worth anything and wanted the sale badly enough, surely they'd put themselves out to get an accurate valuation?

Sounds to me like you're being walked right over, because you're so desperate to own this house.

[dhutch]

TonyRPH said:

If your estate agent was worth anything and wanted the sale badly enough, surely they'd put themselves out to get an accurate valuation?

You would have thought so, but sadly the agents appear to have one valuer, who is pleasant but can't seem to do anything but value houses to put on the market, due to time constraints if nothing else. The vendor is stubborn and clearly not bothered about time frames or even loosing their onward purchase. Two years in I bet the estate agents are fed up with the vendor too, how much effort do you put in to get a sale? The agent works for the seller not me, so if the seller is an arse....

... not trying to justify their in action. Just explain how I see it.

TonyRPH said:

Sounds to me like you're being walked right over, because you're so desperate to own this house.

Always interested in peoples thoughts, it's why I posted the thread. However I think that's a bit harsh.

We're putting some leg work in to make it happen, because the house ticks a lot of boxes and we like it.

The original price offered was a price we where happy with, for the house we would get.

The down valuation isn't our fault, but while we may never get to the bottom of it, may also not be theirs either.

Who knows. Is there anything wrong with liking a house and putting work in to get it?

We don't want a new build, or a modern house, or to live on a busy street, or in an overly rural location, and we don't have the budget for a lot of tge large 4beds in desirable locations. If the worst thing about this house is it's faff to get a mortgage, given we hope to be here 40-50years maybe that's ok?

Happy to be wrong, but just thinking aloud.

Only ever bought one house before in my life, and a very different house it was, but that was also a larger slightly problematic house if not any issues with the mortgage, and so far that's gone very well.


Daniel

[TonyRPH]

I think that you should heed the down valuation as a warning.

About 3 years ago, a house in my street 'sold' for £200k.

Several people up and down the street had pamphlets from the agent asking if we wanted to sell blah, blah and making a huge thing about this "record sale price".

However...

The sale feel through, we presume due to a down valuation. The highest price we'd ever seen in our street was ~ £175k at that point.

And the final outcome?

The vendor of this house bought the semi next door, and now their son / son in law is living in the '£200k' house, with no record of it having changed ownership, so I guess it never did sell.

And to this day, houses here are still achieving £180k at best.

[dhutch]

So hard to know.

If you have a house on the market for 485, offer accepted at 465, homebuyers values up, the the lender wades at 380k you think 'farrk, that wasnt the plan' and set about trying to work out if it's you or the mortgage valuation that's out.

You speak to the survayor who did the homebuyers, a nice bloke in local place you picked as it seemed good.
You speak to the estate agents and get what you can from the negotiators and the valuer.
You speak to your mortgage advisor and get what you can from the lender and their valuer.
You contest the outcome and see what happens there. If it changes or if it sticks. Which I did.
You select another lender and see what they will lone at and find that to value up without any issues.

Then you have a reasonable but conflicting set of data, on a subject you are an amateur at, and have to make a call!

A lot would walk away. But then a lot would also be happy paying 465k for a 1990's barratt homes house.

Three stories of stud walls, in which no room dimension exceeds 4m, a kitchen not designed for cooking in, about 40sq off soggy lawn edged with gravel, and one parking space and a single garage with no power that is a foot narrower than a car. I degree...


Daniel

[Jobbo]

I think you're overthinking this completely. The only person who can decide whether they should be paying £465k for the house is you - the mortgage lenders can say no which would obviously make your mind up for you, but you've got one saying yes which makes it entirely your decision.

Without more detail of the property (i.e. a link) nobody else can really give you any further advice on that. You say the estate agent's valuer only spends his time valuing houses for sale; I bet that's his exact job description! He certainly doesn't work for you or have any reason to justify his valuation (which may not even be the figure it's been marketed at) particularly when you have already agreed to pay £465k.

Good luck with it; you genuinely sound like you want the house, you have a mortgagee willing to lend on the purchase and therefore you're in a position to proceed.