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When you remortgage the lender will do a valuation of your property, but how do you know if the valuation is accurate? We look at how lenders carry out their valuations and ways you can check whether or not the valuation is a fair value.
Lenders need to undertake a house valuation for remortgage for two reasons:
As part of a remortgage application a lender will undertake a mortgage valuation and instruct its own valuation surveyor in order to be sure that the property is adequate security for the mortgage. To get an idea of what a mortgage valuation for remortgage is likely to cost, see our guide to remortgaging costs.
That may be a full valuation by a surveyor but could be a drive-by valuation when the valuer inspects from the road or even an automated desk-top valuation. The valuation will give the lender an indication of the market value of the property taking account of comparable sales data. The valuation is independent of the lender.
The valuation will be the figure that will be used by the lender to calculate the loan to value. This is the percentage of the property value that you are borrowing. So, the house valuation for remortgage will have a bearing on the deal that you can get. The lower your loan to value, the better the deal you are likely to get.
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To get an idea of your house valuation for remortgage, you can research your property value using online valuation tools. They are a useful way of getting a realistic idea of comparable property values, as they take information from the Land Registry Database to list actual sales. You could also look at current asking prices of nearby properties but that could be a more optimistic figure. While the market may have moved on during the last few months, the vendors may not actually achieve that price.
Use our free instant online house valuation tool to get an idea of what your house is worth.
If you are trying to get an idea of the value of your property before remortgaging, estate agents will be able to give you their idea of what price you’d market the property at. But, even if you did invite a few agents to provide a house valuation for remortgage, there is likely to be variance. The highest value may sound appealing but might be aimed at securing your business, for example.
When it comes to how to value your property before remortgaging, you should use the most realistic valuation figure for your application. This is so that you select the right deal for your situation. You should not expect the lender to increase the value of the property.
The interest rates available to you will only be affected if a down valuation pushes you into a different Loan-to-Value band. If this is the case, then some lenders, including Halifax, will not charge you a fee for switching to a different product in their range.
However, if you are changing product, it is also a good idea to review the market again to check that it is still the best option for you.
Explore remortgaging options with fee-free mortgage experts at L&C today
HomeOwners Alliance Ltd is registered in England, company number 07861605. Information provided on HomeOwners Alliance is not intended as a recommendation or financial advice.
Mortgage service provided by London & Country Mortgages (L&C), Unit 26 (2.06), Newark Works, 2 Foundry Lane, Bath BA2 3GZ, authorised and regulated by the Financial Conduct Authority (FRN: 143002). The FCA does not regulate most Buy to Let mortgages. Your home or property may be repossessed if you do not keep up repayments on your mortgage.
HomeOwners Alliance Ltd is an Introducer Appointed Representative (IAR) of LifeSearch Limited, an Appointed Representative of LifeSearch Partners Ltd, authorised and regulated by the Financial Conduct Authority. (FRN: 656479).
Independent Financial Adviser service is provided by Unbiased, who match you to a fully regulated, independent financial adviser, with no charge to you for the referral.
Bridging Loan and specialist lending service provided by Chartwell Funding Limited, registered office 5 Badminton Court, Station Road, Yate, Bristol, BS37 5HZ, authorised and regulated by the Financial Conduct Authority (FRN: 458223). Your property may be repossessed if you do not keep up repayments on a mortgage or any debt secured on it.
