The truth is, depending on your chosen lender and their terms, you don’t always have to get a remortgage valuation carried out by a professional. In fact, you can use online valuation tools or take an educated guess yourself. There is a downside to doing that though and this guide explains why.
Why do remortgage lenders want a property valuation?
Lenders need to know how much your property is worth so that they can assess the loan-to-value ratio. That’s the proportion of the loan you want (as a percentage) against the property’s value.
This figure helps them measure the risk they’re taking on when approving a remortgage for you. The higher the LTV rate, the higher the risk because they’re lending a higher percentage of the property’s value.
It’s not all about LTV rates though. If for some reason, you default on your remortgage payments, the lender may have to repossess the property. They need to know how much it’s worth so they have a better idea about whether they’ll make their money back if it comes to them selling it to cover the debt.
In other words, the lender needs to know the property is adequate security for the mortgage.
How does a remortgage valuation work?
When you want to remortgage, your chosen lender will likely ask for a mortgage valuation, so they can determine how much your property is worth and subsequently, how much they can loan to you.
Usually, the higher the property value and the more equity you own, the better the deal but other factors like your credit history and job stability can affect this too.
The mortgage valuation is independent from your lender, though your lender may put forward a professional surveyor to conduct the valuation. In many cases, a mortgage valuation is free because lenders want to incentivise homeowners to remortgage with them.
If you're remortgaging with your current lender, they may well offer a valuation for free too. You should still always check whether there are any costs associated with getting your house valued though as some will charge a fee for this service.
What types of valuation are there?
If you chosen lender organises for a property valuation to take place, they will either have it done by:
A full valuation by a RICS surveyor
A drive-by valuation when the valuer inspects from the road
An automated desk-top valuation
There are also additional surveys that your lender may require in order to get a more accurate valuation for your property. These may include:
A homebuyer report - this highlights structural problems like dampness.
A building survey - this is more in depth and the surveyor may look into the attic, at the roof and even under the floorboards.
A full structural survey - this is the most in-depth survey and will give you a list of defects, repairs and maintenance options. If you’ve had work completed on your house like an extension or conservatory, the survey provides details on any issues that affect the value of the property.
How long does it take for a lender to get a valuation on my house?
Tht depends on your lender and also the availability of the surveyor they want to use but usually, when possible, lenders like to have a mortgage valuation completed within 2-3 weeks.
Downside of getting your lender to value your house
They could undervalue it which could result in you being able to borrow less.
You could be well into the remortgage process before you realise the valuation is wrong, leaving you with little time to change the direction of the remortgage.
Some lenders don’t have criteria that allows them to remortgage against run down properties, high-rise buildings, those above a shop or restaurant or those within flood risk zones. If they conduct a valuation and conclude that they can’t lend to you, you may have paid for a valuation for nothing.
How do I know the valuation is accurate?
You don’t and that’s the problem. Something useful to know is that if the lender has carried out a desktop mortgage valuation you have the right to ask for a physical property valuation. That way you can see the mortgage valuation report which will list the reason for the down valuation.
You can also move to an alternative lender to see what they feel your property value is or you can conduct a valuation yourself by:
Valuing your property online
There are a lot of online property portals like Rightmove and Zoopla that have online valuation tools. These can give you a good idea of comparable property values in your area and better still, your street. You can view previous listing prices as well as what the properties have sold for and when.
Keep in mind that if the property value is from a few years ago, it may now be higher. These tools can be fairly accurate as they pull information from the Land Registry Database to list actual sales.
Asking an estate agent
Estate agents that are familiar with your area and the type of property you want to remortgage can be a useful source of information. They may be able to come to your home and provide a rough guide as to how much the property is worth based on similar properties in the area and their knowledge of the current market.
Something to be mindful of is that some estate agents may overvalue your property in order to secure your business and it’s likely that if you had an additional estate agent come to value the house, they’d provide a different valuation. It can be a good idea to get at least three separate agents from different companies to come and value your property.
Asking a mortgage broker
If you’re getting remortgage advice and arranging your new deal through a broker, it can be a good idea to have them arrange your property valuation too. Having everything under one roof, so to speak, is efficient and minimises the chance of delays because it’s your broker's job to chase the other professionals involved in the process up, to speed things along for you.
It’s in your interest to get the most accurate valuation because the deal you’re offered by a remortgage lender will be based on the value of your property and your loan-to-value rate i.e. how much equity you have versus your outstanding mortgage. Get a valuation you can rely on and head to a mortgage broker that specialises in remortgages.
They’ll also have access to a digital catalogue of lenders and can quickly pull up the ones you’re eligible to apply for, as opposed to you having to scour the internet and call multiple lenders for quotes.
Does a mortgage broker charge for their service?
Usually yes. For example, with The Mortgage Hut, there may be a fee for the remortgage advice you receive from our brokers, each of whom are qualified and reviewed by real people. The actual amount you pay will depend upon your circumstances and the service you opt for. The fee is up to 1.5%, but a typical fee is 0.3% of the amount borrowed.
As part of their service, your remortgage broker will:
Ask a few questions about you, your property and what you want, to see if they can secure the remortgage you need.
Find a list of lenders that can offer you an affordable deal with terms that work for your situation.
Explain the pros and cons of each lender to help you make an informed choice.
Manage your application by sorting out all the paperwork & managing the whole process.
Complete your mortgage in good time.
When you work with a broker from The Mortgage Hut, you can also track the progress of your remortgage application via our App. You can instantly message your broker, upload documents and sign paperwork using your phone.
When you’re ready, get in touch
Let’s get your remortgage sorted. Our brokers listen to what you want and can check your eligibility for a remortgage without damaging your credit score. They can arrange for your property to be valued so you get a remortgage offer based on an accurate loan-to-value rate.
Call 023 8098 0304 or leave us your contact details using this form and a member of the team will be in touch when it best suits your schedule.