As a rule, the more equity you have in your property, the better rate you will get.
So how do you know how much your property is worth?
Most of us probably think we have a rough idea, but it is always the new lender who makes the final decision. At the moment lenders have a tendency to down value a property just enough so that you don’t quite qualify for the deal you wanted, but they are still prepared to lend at a slightly higher rate. They are in business to make as much profit as possible, after all.
For example, if you think your house is worth £200,000 and you owe £140000, you would qualify for a 70% loan-to-value mortgage. But if the lender decides they think it is only worth £195000, you no longer qualify for that deal.
It is very difficult to contest a valuation that a lender puts on a property. They will usually want comparable proof of a similar property that sold on the same street within the last couple of months. If you can’t provide that evidence, you are stuck with their valuation.
If you are thinking of remortgaging, have a look to see if your property is on the borderline of the required loan-to-value. Although a lender’s surveyor will rarely give you the benefit of the doubt, Limetree Financial Services will do everything it can to get you the best remortgage deal possible.