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House valuation for remortgage

Thomas Miller
31.01.2023, 07:37
5 min
Table of Contents

Did you know you can revalue your house for a remortgage and enjoy lesser interest? This article addresses house valuation for remortgage and issues to expect in house valuation for a remortgage. 

Valuations of the house for remortgage

What is a remortgage? In the UK, remortgaging involves contracting a new mortgage with a different mortgage firm. This does not mean taking more loans from the same lender, as other jurisdictions may put it.

You will need a house valuation when you decide to go in for a remortgage. While engaged in this contract, you still stay in your house. It may be time to remortgage when;

  • your current mortgage deal is about to end, and your house has increased in value meaning you have wider deals available
  • you want to raise funds for house improvements
  • you experience certain planned or unplanned life changes that would warrant a bigger space
  • you are planning to take more money against your house  

In any of the above situations, you will need a new valuation of your house, financial advice and the ability to meet the new financial obligation.    

Do you have to get your house valued to remortgage?

Remortgaging is mainly done because there are cheaper deals available or people want more funds for their house. You may necessarily not be responsible for valuing your house in remortgage. However, you will need a fair valuation of what your house is worth now. This will help you confirm what your new lenders quote. 

Lenders will need a house valuation if you plan to take a new loan for your house. In the UK today, around 30% of house loans are remortgages. This is because people are looking for cheaper deals each day. Why will one continue to pay a 5% interest when 3% is available now?   

Valuation for remortgage purposes

  • Valuation sets the tone for a remortgage. The first thing your new lenders will do is conduct a valuation of your house to know the current worth of your home. 
  • House valuation for a remortgage helps new lenders calculate the further monthly repayment and applicable tenure.
  • It also helps lenders to ascertain the loan-to-value (LTV) ratio, which informs the interest rate applicable. 

How to get a house valuation for a remortgage?

A house valuation for remortgage can be conducted by 

Valuing your property online 

  • Free online estimators are readily available to help you get an instant worth of your house for a remortgage. These online estimators ask a few questions from the homeowner to provide an estimate.  

Using certified surveyors or estate agents 

This can be done by;

  • Physically inspecting the property is when surveyors visit the property and assess the core issues of such property. Such an approach helps to obtain all hidden defects in the house.
  • Engaging in desktop-style valuation.
    This is when valuers sit behind their computers and compare the prices of other houses.
  • Sometimes, appraisers can even drive around the house and conduct an appraisal. This cannot be done for high-risk houses. For properties whose materials are not common, valuers may need to visit the property. 
  • Conducting a comparative analysis. Estate agents and surveyors may also conduct a comparative analysis by focusing on the current prices of similar houses sold in your area.

Lenders make the decision on what type of valuation they want depending on the house in question.  

House valuers carry out the same activities (interior, exterior assessment, and construction type) as we discussed in house valuation for a mortgage in a different article. The only difference is that remortgage will give you the chance to pay less and save more. 

House valuation for a remortgage, what to expect?

Lenders will lend you the money after their valuation is in line with what is quoted as the potential price for the house. 

However, in a down valuation where valuers indicate that your house is worth less than you think it is, lenders may ask you to reconsider the quoted price or deny you the loan. 

You can also challenge your lender’s valuation with reliable evidence. However, this is tricky as the onus lies on them to agree or disagree. You may need to submit three similar price quotations of houses that have recently been sold. Prices of housing yet to sell cannot be used. 

When all these prove futile, you will need to contract a new lender for a different valuation.  

It is good to be excited about getting a good deal for your house loan after revaluing your house. However, several key issues might disqualify you for remortgage even after valuing your house for such purposes. Some of these are;

  • Poor credit score 

Your new lenders will assess the creditworthiness from the past by looking at loan defaults in the past if any.

  • Low income

Your lenders will need to assess your income and expenditure to ensure that you can afford the new amount borrowed.

  • Unwillingness or inability to pay the cost of remortgage

Some charges associated with remortgage are, application and valuation fees that may be charged by your new lenders, solicitor or conveyance fee charged by someone to handle the transfer of your mortgage, and lastly penalties for early termination that may be charged by your previous lender.

Cost of house valuation for remortgage

Some firms add the valuation cost to the remortgage package, hence no fee is paid. This is a very common practice done to win clients. However, others charge from £250 for valuing a house for remortgage in the UK.

Remortgage valuation tips 

It is important to do these before house valuation for a remortgage. 

  • Visit an online house estimator for a current house valuation 
  • Research the property price trends in your area 

Your house value may not be the same as that of your lenders, but it must be closer to theirs for them to approve the mortgage loan. 

  • Valuation of the house in remortgaging is as important as the initial mortgage valuation.
  • Your remortgage will not be approved if the price quoted is far higher than the lender’s valuation.
  • Free house valuation is a common practice used by mortgage firms as part of the remortgage package to attract clients.
  • Valuation for remortgage can be conducted in person or in the office by comparing other sales. 

FAQ

What to do if my remortgage has been downvalued?

In a down valuation where the property price is higher than the lender's valuation, you may ask the property owner to reduce the price or try a different lender or bank for an upward valuation. You may also raise the extra funds elsewhere or cancel the transactions if all these avenues fail.

How much deposit is needed for a mortgage?

The amount of deposit to pay depends on how risky the lender assesses the client to be and the value of the amount borrowed for the mortgage.

Can I obtain a valuation for remortgage by a mortgage broker?

Yes, mortgage brokers are skilled persons that can assist you with a valuation for a remortgage. They know several similar properties and software used for valuation.

Do mortgage brokers charge for their services, and how can I get a broker who does not charge?

Yes, brokers charge between £500 and £1000 for their services, but some provide the services for free.

For more information on house valuation for remortgage, contact us at RealAdvisor for an accurate valuation that will land you a remortgage deal.

Visit https://realadvisor.co.uk/en/appraisal for valuation now.

Thomas Miller
Thomas Miller has been a real estate agent for over 4 years now, when he is not in the field, he is dedicated to his second passion, writing, especially in the real estate market.
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