Re-Mortgaging - Bank Devaluation

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Hello

I'm in the process of trying to get a new fix rate deal locked in for when my current one expires at the end of November and the rates increase further. My current payslips show 'SICK PAY'. I have had colon surgery in May and liver surgery this month, so I've been off sick for a total of 2 months so far. I get full basic pay for 6 months, so there is no problem there, and the intention is that I return to work towards the end of this month (no chemo/immunotherapy is planned). 

The broker recommended a bank that wouldn't look too harshly about being off sick, so long as I provided a return to work date and that I will be in the same job/T&Cs. I provided this and the bank has provided a mortgage offer.

The problem is, their surveyor has undervalued my property by about £20K. I know the reason for most of that, as a lot of that missing value is based on me extending the lease on my flat (completed last January) but Land Registry have a backlog and still have not processed it, so the surveyor can only go on what Land Registry currently has for how many years are left on the lease (I have asked Land Registry to expedite it). 

Due to the devaluation, it has changed the product from a 60% LTV to a 75% LTV. Broker said that as the product on the 75% LTV is exactly the same interest rate, I should just accept it rather than challenging the valuation. I feel a bit pressured to accept this and count myself lucky that I am being offered a new mortgage, but my question is, would that incorrect LTV affect me later on? If in a year or two, I want to upgrade to a larger property, would it affect me applying for a larger mortgage on another property (as an incorrect LTV on my current property assumes I will have less equity to put towards the new mortgage), or would it not affect me applying for a larger mortgage on another property, as it will just depend on what I actually sell my current property at?

I don't want to wait until August for my payslip to show normal again, as the remortgage rates on offer may be somewhat worse then. 

I've only ever bought one property and never upgraded/become a part of a chain, so excuse my ignorance.

Thank you

  • Thanks for your question  

     

    A survey is carried out to value a property every time somebody applies for a new mortgage. This includes a remortgage on the same property but to a different lender. If you wanted to purchase another property in the future, your current loan-to-value (LTV) would not affect the new mortgage as the factors involved would be your current property’s sale price and the new property’s purchase price.

     

    The current lender may look at a product switch without carrying out further checks such as an affordability assessment or credit check. Re-mortgaging with another lender will be treated as a new mortgage application and will likely mean a new credit check, affordability assessment and potential set up fees. So it is important to consider these options carefully when choosing a new product.

     

    Thank you for getting in touch, I hope this helps.

     

    James

    Financial Guide

     

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