Why you should get a house valuation before remortgaging

house valuation being conducted before remortgage

When it comes to remortgaging, it’s important to consider it as a strategic financial move. Remortgaging can offer opportunities to secure better mortgage deals, reduce overall monthly mortgage payments, or release equity in your home. So, getting your house valued is essential to know how much you can borrow or release.

Mortgage lenders insist on a property valuation before remortgaging to determine the loan-to-value ratio (LTV). Generally, the lower your LTV, the better interest rates you can expect and the more equity you can potentially release, which is why getting an accurate valuation is crucial.

In this blog, we’ll explore why it’s important to understand what your property is worth before embarking on a remortgage application and what happens when a mortgage valuation occurs.

Goldmanread is a mortgage broker with a great deal of experience in arranging remortgages for clients in Essex and beyond. To discuss your remortgage requirements, please get in touch.

What is a house valuation?

A mortgage valuation consists of a survey and/or desk-based research to work out your property’s value.

A remortgage valuation is usually carried out by surveyors acting on behalf of your mortgage lender and can take place in person or remotely. Some house valuations are more in-depth than others, depending on the age and condition of the property. A building survey may be necessary in some cases.

How do you get a house evaluation?

In advance of a formal mortgage application, you can do your own desktop research to find out how much your property is worth using websites like Zoopla. Crucially, these sorts of sites list actual sales rather than asking prices, giving you a better indication of your property’s value.

Alternatively, you could arrange for your local estate agents to undertake a valuation survey. Do take their valuation with a pinch of salt, however, as they are looking to win your business and may be somewhat overenthusiastic with their estimate.

An official valuation will be carried out by your chosen mortgage lender as part of the remortgage process. Lenders often offer free valuations when you apply for a new mortgage deal.

Does house value affect remortgaging?

The value of your house will absolutely affect your remortgage, because the lower your loan-to-value (LTV) (i.e. the amount left on your mortgage compared to the value of the property), the lower the interest rate you are likely to be offered.

A house valuation also determines the amount of equity you have in your home (i.e. the difference between your property value and the balance of your current mortgage). So, if you are looking to release equity, the valuation is key to understanding how much you can potentially release (providing you meet the lender’s criteria).

Read more about equity release in our helpful article.

Do I need a property valuation to remortgage?

Yes, when you remortgage, your mortgage lender will insist on a valuation to determine how much your property is worth.

Free valuations are commonly used as incentives for new customers in the mortgage market, along with things like free legal fees. Often, you will be given the option of upgrading the lender’s valuation to a homebuyer report or full structural survey at an additional cost.

If you are simply arranging a rate switch or further advance with your existing lender, there is usually no mortgage valuation cost.

How will my home be valued?

Increasingly, lenders use an automated valuation report (AVM), i.e. desktop mortgage valuation, instead of a physical survey to determine market value.

During a desktop valuation, a surveyor uses online valuation tools to estimate the property value. This includes looking at the Land Registry Database, the sale prices of similar properties in the local area and house survey data for comparable properties.

Your local estate agent may also use AVMs to assess the value of the property. However, they will also take into account their market knowledge of local house prices and the agreed sale price of similar properties.

In some circumstances, a surveyor will conduct a drive-by valuation (sometimes called a kerbside valuation survey), where they assess the proposed remortgage value via an external inspection.

What happens at a remortgage valuation?

During a physical remortgage valuation, a surveyor will visit your property. They will check the interior and exterior of the property to confirm if the property is in mortgageable condition.

The surveyor will collate their findings after their visit and may conduct desktop research into things like comparable property values. Finally, they will produce a mortgage valuation report to submit to the lender.

How long does a remortgage valuation take?

A physical remortgage valuation should take no longer than 30 minutes, depending on the size and condition of your property.

The surveyor must have access to the entire property to produce an accurate remortgage valuation. If they cannot inspect the entire property, the risk of a down valuation is higher.

What does a surveyor look at?

When a surveyor decides to visit your property, they will look to confirm the following:

  • The number of bedrooms and habitable rooms in the property.
  • There is a functioning kitchen and bathroom.
  • The external condition of the property, e.g. any signs of subsidence, problems with the roof structure, etc.
  • The internal condition, e.g., signs of damp or any major internal repairs required.

How to prepare your house for a mortgage valuation

When preparing for a mortgage valuation, the most important thing is to ensure that the property is clean, tidy and accessible, both inside and outside, so that the surveyor can carry out their inspection without any hindrance.

Looking to remortgage? Get in touch with Goldmanread

As professional mortgage brokers, Goldmanread has provided clients with mortgage advice for many years. We have an in-depth knowledge of the remortgage market and know which lenders to approach for the most competitive rates.

We are also very knowledgeable about different lender criteria for remortgages. As your mortgage adviser, we can provide valuable remortgage valuation tips to ensure you can access a competitive interest rate from the right mortgage provider.

Contact us today to get started.

Frequently asked questions about getting a house valuation before remortgaging

What if my house is not worth as much as I thought?

When you have your house valued, it may be worth less than expected, which is known as a ‘down valuation’. A down valuation may result in a less competitive remortgage deal and higher monthly mortgage payments. You may even fall outside of your current lender’s loan-to-value (LTV) range.

In this scenario, it’s important to seek the advice of independent mortgage brokers, as it may be possible to find a competitive deal from an alternative lender.

It’s worth noting that if the down valuation results from a desktop valuation, the applicant will often be given the option of a physical property valuation, which can result in an increase in the property value. So do insist on this if you are not offered one.

Are property valuations needed to release equity?

Yes, mortgage valuations are key to assessing how much equity you have and, therefore, how much cash you can release.

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Clive Read

Clive Read is an appointed representative of PRIMIS Mortgage Network. PRIMIS Mortgage Network is a trading style of Personal Touch Financial Services Ltd which is authorised and regulated by the Financial Conduct Authority.

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