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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 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 deals you may get access to. The lower your loan to value, the better the deal you may be able to get.
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Your home may be repossessed if you do not keep up repayments on your mortgage.
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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.
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.
If the valuation survey results in a down valuation and this pushes you into a different Loan-to-Value band, you may be charged a higher rate on your mortgage. If this happens, it may be a good idea to speak to your mortgage broker again to check whether this is the best mortgage for you.
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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.
