Correct at 31/12/2023
Thinking about remortgaging your property? Getting an accurate remortgage valuation on your home is an important part of the process.
At its simplest, a mortgage valuation is a way for a lender to confirm the value of property that you’re planning to remortgage. Also called a valuation survey, it is the same process that the lender followed when you bought the property.
Doing a home valuation for a remortgage confirms the property’s value, that it provides suitable security for the loan and determines the loan-to-value (LTV) ratio. The LTV is the amount you borrow in relation to the value of your home and determines the mortgage rates you are eligible for.
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When it comes to buying a home there are four main types of survey: a mortgage (or remortgage) valuation survey, a condition report, a homebuyer report and a building survey. The type of survey will depend on factors such as your home’s location, how old the property is and whether there’s anything unusual about its construction.
However when it comes to getting a house valued for remortgage a basic valuation is usually all that the lender will require. In some cases, a qualified surveyor will visit your property and put together a short report. In other cases, they will perform what’s called a “desktop valuation”. This is when surveyors use recent sales data from similar, close-by properties to calculate the value of your property. Sometimes, the surveyor may also do a “drive-by valuation”, which just involves seeing the property from outside.
The cost of completing a house valuation for remortgage is usually based on the price of the property and can range between £150 and £1,500. However, lenders often offer free valuations as part of their remortgage deals, for which they often use desktop valuations.
After your remortgage valuation, the surveyor will give their assessment of the value of the property to your mortgage lender. If they agree on the remortgage valuation, and nothing is flagged as an issue the remortgage process will continue as normal.
Your remortgage valuation will also show you your current loan to value (LTV) ratio. Your LTV is the size of your mortgage compared to your property’s value. So if your home is worth £200k and your outstanding mortgage is £150k, your LTV is 75%. In general, the lower your LTV, the lower your interest rate – and the wider your choice of mortgage deals.
Sometimes, after getting your house valued for remortgage, a surveyor may conclude that the price is higher than the property’s actual value. When this happens, it is called a “down valuation”. If it occurs, your lender may want to reconsider the details of the remortgage offer and could either change the rate they are prepared to offer or reduce the loan amount available.
A surveyor might down value a property for a number of reasons. Some of the most common reasons include overstating the value on the application form or structural problems with the property.
If you're faced with a down valuation from your lender and are unsure of your next step, don’t panic as there are still pathways available to you.
The first step should be to talk your adviser. They may be able to send you the report which details the valuer’s findings and supporting evidence. It’s a good idea to carefully look through this to see if there’s anything you disagree with or would like to question.
For example, if you feel the comparable properties the surveyor has used for their report are not similar to yours, you can send examples of other properties that you feel would be more suitable for comparison.
There are also ways to avoid a down valuation in the first instance, and keep your remortgage on track.
To avoid a down valuation, you’ll want to do some research ahead of time so you have a good idea of what your property is worth. To do this, consider the following steps:
If you are planning to remortgage your property and want to switch to a better mortgage deal, here are some remortgage valuation tips worth keeping in mind:
Be sensible with your valuation estimate
Whilst next door might have been on the market for a record amount for your street, bear in mind that what was listed as the price on the estate agents website might not have been what it sold for. When a surveyor carries out a home valuation for remortgage they are looking at what similar properties in the area have sold for rather than what they were on the market for. There are some helpful tools online where you can check recent sale prices in your area.
Work with an experienced mortgage broker
It is always a good idea to work with a knowledgeable mortgage broker like L&C. Mortgage brokers have expert market knowledge and insight into the best ways to approach your remortgage. Based on your specific requirements and circumstances, a mortgage broker will be able to suggest the best options if you’re worried about getting your property value right on your application.
No, lenders will appoint their own surveyor, so you won’t need to find a surveyor for a remortgage on your own.
There are lots of online tools and websites that will give you an idea of your property’s value. However, whilst these can be helpful in getting an idea of your property’s value, any lender you remortgage with will still want to carry out their own property valuation for your remortgage. But it could help you to narrow down the value and get an initial idea of its worth.
It might seem like a good place to start if you don’t know what your property is worth, but spending money on a valuation before you apply isn’t worth it as any lender you remortgage to will want to carry out their own valuation. If you are unsure of where to start speak to an adviser at L&C and they’ll help you with the next steps for your remortgage.
Sometimes, remortgaging with the same lender will get you the best deal, but other times it won’t. Keep an open mind and scan the market for the best deals or, get a broker, like L&C to help. We can advise you on the best deals for your particular circumstances to help you get the right remortgage deal for you. Home valuation for remortgage doesn’t need to be a stressful process when you have the right guidance.
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