Will the Bank Require a Valuation on my Property?

If you’re looking to remortgage your home, there are a series of processes that will likely have to occur, and a valuation is one of them. A remortgage is effectively a new mortgage that pays off your existing one with borrowing on the same property.

Remortgage lenders therefore need to carry out similar checks to what happens when you take the original mortgage out.

Falling Prices

There was a time, during the continuous period of rising house prices, when some lenders were less bothered about having valuations done, particularly if your original mortgage wasn’t too long ago (as there would likely have been a valuation done then).

However, today’s falling house prices and troublesome economic pressures have meant that lenders now need to take more care when lending on properties. For this reason it’s probably more likely that a valuation will be carried out on your property, although this is not certain.

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Borrowing

Essentially, it’s up to your remortgage lender to decide whether a valuation is necessary. The main purpose of the valuation is of course to calculate the borrowing, and what deal you are offered may well depend on what percentage of the property’s value you’re looking for.

The Loan To Value ratio will affect what rates and terms a lender is willing to give you on a remortgage, and naturally whether you’re going to be offered a deal that appeals to you.

Work it Out

When you are thinking about remortgaging, as well as taking the time to compare the available offers, you should be sure to use a remortgage calculator to help you work out the cost of the remortgage. When you’re doing this, remember to take into account costs such as valuation, set up and legal fees, as well as any exit fees that may be payable for ending your current mortgage early.

Lender

Whether or not a valuation is necessary may also depend on your lender. For example, if your remortgage is going to be with the same lender as your current mortgage, they may be less likely to carry out all of the same processes as will take place if you’re moving to a new lender.

When weighing up the merits and drawbacks of a remortgage, be sure to include all of these potential costs in your calculations, and only go ahead if you’re sure it’ll be worth your while.



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