Mortgage Valuation

Mortgage under valuation what can I do?

Some people consider a mortgage valuation one of the pinnacle parts of the mortgage application process. So, what happens if the house you are purchasing is undervalued?

Firstly, let’s look at why an under valuation can happen…

Your mortgage valuation is based on a couple of factors:

  1. The cost of recently sold properties in the immediate area
  2. The condition of the house you are wanting to buy


The mortgage lender is simply protecting the money they are loaning.  Mortgage lenders have a priority to protect their debt not yours, so they need to know the risk involved in you paying back the debt, and if the house is not realistically priced, they will not loan an amount which is not in keeping with the area and the condition of the property.

So what can you do, and how will an undervaluation affect your mortgage?

All it will affect is the amount you can borrow.

For example:  If you have put in an offer of £250,000 and have a 10% deposit (£25,000) and the lenders mortgage valuation comes in at £200,000, you will now only be able to borrow 90% so £180,000. The original deposit of £25,000 means you now have £45,000 less than you need to buy the property you want.

What are your options in the event of an undervaluation?

  1. Make up the shortfall if possible yourself or by asking a relative or friend where possible! Just be mindful of paying too much for the dream.
  2. Try renegotiating the price with the seller. This can be done directly with the vender of through the estate agent. Be aware that if you are in a chain this can really affect how long the process may take.
  3. Appeal. You can ask the valuer to reconsider their decision.  Do your own research of recently sold similar properties within close proximity.  Ask the estate agent who is selling the property to intervene if need be.
  4. Switch mortgage lenders. You could try this but ideally as a last resort and hope they value the property differently.
  5. Contact us! We are a whole of the market mortgage brokerage we have access to sooooooo many lenders and are more than happy to assist you for free!

Click here to speak to Mortgage Brokers with a combined knowledge of 75 years!  Yes, we know what we are doing, and we make dreams happen every day without feeling the need to be greedy and charge you a fee!


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