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Newbie remortgaging query

Bought a house in the Thames Valley in 1995 with a 5% deposit. Neighbouring properties with identical features now fetch more than three times the price of what I paid.

I am thinking of remortgaging the property, not just to get a better interest rate but to release some equity and repay some high interest loans. I have heard of a _slight_ donwturn in the property market nationally, and _less_ people remortgaging to release cash, but I still get professional people putting notices through my door 'I am relocating to these parts, are you thinking of selling by any chance' so I am not too worried about the local situation.

I am fairly clueless in personal finance matters but I do know that remortgaging is not great for buying cars etc. (as they don't tend to last the 20+ years I'd be paying the new mortgage off for ...).

To get to the point, I am wondering how do I make sure I get an independent, but mutually acceptable, assessment of the property's current value ?

I am confused whether it may be in a lender's interest to _slightly_ overegg a property's value estimate, because whatever you put down in cash is then a smaller deposit, in percentage terms, and they can charge you higher mortgage interest.

Or am I missing soemething here - could it be in MY interest to have the propoerty valued optimistically? And what are my options if I don't 'like' a valuation?

Reply to
Martin
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If you "release" (more correctly "extract") equity, it's always a good idea to pay it back again as quickly as possible, and not to leave the amount outstanding for the life of the mortgage.

Not important.

Unless those high-interest loans you mentioned are huge, this shouldn't matter to you much. You say you started out with 5% equity and that the house has approximately tripled in value. That would mean, provided there have been no other equity withdrawals in the meantime, that your equity should now be at least 68% or so. Most lenders would probably have no worries about letting you reduce that to 20%, which means you ought to be able to borrow almost half the present value.

If the size of your other debts is anywhere near this, you're in deep trouble anyway and ought to consider selling up and trading down.

This is only relevant if you're seriously considering reducing the equity level much below 20%. You shouldn't be doing this. The lender shouldn't be doing this either, because they'd be increasing their risk exposure. Charging higher interest for lower equity loans is, after all, *because* the risk is higher, and the last thing they need is to make the problem worse by underestimating the risk by overestimating the value.

That depends on what you consider your interest to be. Yes, it could be, because a higher valuation means (given a fixed limit to the loan/value ratio of say 80%) that you can borrow more money (either without going to a higher interest rate, or indeed at all). But there is a downside too, because you need to be able to afford the payments.

None. You could try a different valuer, but in the end the lender will use their own, so you might as well not bother getting your own. You already have data at your disposal, from actual sales in your area. Haven't you? You haven't been going just by asking prices, I trust. The lender's valuer will just consult similar sources, so shouldn't differ wildly from your realistic estimate.

Reply to
Ronald Raygun

In message , Martin writes

Dont be so sure about these notices:

I know a property speculator/developer who uses these types of notices to get people to sell to him. Then, as the transaction progresses, he screws them down on the price. If it doesnt reach a level he wants, he walks away. I think he also poses as a happy family moving to be near schools for his childrens' education.

Reply to
Richard Faulkner

Similar letters from estate agents are total lies also.

Reply to
Peter Saxton

In message , Peter Saxton writes

Whilst I am loath to defend them, (now that I am not one), they are not always lies - e.g. between 2000 and 2004, you could mailshot an area and be reasonably confident of being able to sell most of the properties in it, and for more than they had sold for previously.

Assuming that people will only sell if they want to, the goal of this tactic was to increase the chances of being asked to "value" the property, and not to "con" it onto your books.

Having said that - now that the market has slowed, they cant be so confident, and are probably playing a numbers game, (lying).

Reply to
Richard Faulkner

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