- Clients were home owners of an impressive and valuable property in London.
- After several years of living in the property, they decided that they would like to carry out some much needed home improvement works.
- Without the liquid cash available to carry out the improvements, they wanted to remortgage their property to free up some equity to put towards the costs.
- Everything was going smoothly until a standard lender valuation of their property came back much lower than expected.
- Because of this down valuation, the whole mortgage was now unaffordable and the home improvement plans were stopped in their tracks.
Our clients were a middle age couple who had been property owners, both residential and buy-to-let, for many years. Both with good, high-earning jobs, our clients were living comfortably for many years in their main residential property in London. Having lived in their property for a long time, they decided that they would like to carry out some much needed repairs, upgrades, and improvements to their home to ensure that it was fit for them to live in for many years to come.
After planning their home improvements with architects and builders, our clients soon realised that the costs of the improvements were going to end up being quite high. Unfortunately they would not have access to the funds for the home improvements immediately themselves, so they approached us to explore their options.
Our clients had used Oportfolio’s mortgage and protection services many times over the years on different properties so they approached us as a respected and trusted professional in the industry. Our mortgage advisor carefully looked out our client’s current mortgage deal, their income and outgoings, and their maximum mortgage affordability based on the value of the property. They determined that there would be no financial issue with the clients remortgaging their current property to free up some equity, and then using this equity to carry out the works.
We submitted a full remortgage application for our clients and it was approved in principle immediately, subject to a property valuation, a standard part of the mortgage process. Surprisingly, when the lender appointed valuer returned the valuation report, they valued our client’s property much lower than expected. Because of the discrepancy with the valuation, the mortgage lender had to reject the mortgage application and everything ground to a halt.
How did we help?
Knowing the property well, we were shocked that the property had been down valued by so much. We immediately contacted the mortgage lender to query the valuation and contest the clearly incorrect assessment. Because of our experience and standing in the mortgage market, we were able to contact a senior person in the lender’s mortgage team and explained the situation to them. We pushed the lender and argued our point with evidence and ultimately they agreed with our concerns.
We managed to get the lender to arrange a re-valuation with a different valuer which was arranged and carried out more or less immediately. The new valuation came back and the property was correctly valued at what we and the clients expected it to be. The lender was happy with the new valuers assessment and the remortgage offer was issued that same day.
The clients were able to use the extra money borrowed in the remortgage to carry out the necessary home improvements and their property is now a modern and updated family home again, that they can be happy in for years to come.
What was the rate?
The loan was secured in five parts as both capital repayment and interest only a fixed rate for 5-years at 2.74%. After the fixed period, they would revert to the bank’s 3.10% standard variable rate at which time we will contact the clients to discuss remortgaging on to another new competitive fixed rate. The mortgage term was 20 years.
If you or someone you know is looking to purchase a new property but are struggling to get the lending you need due to outstanding credit commitments, give our friendly advisor team a call today to discuss your options.