20 October 2016

The valuation on your property is for the Lender

As part of the mortgage application process, lender's will require a valuation of the property on which the mortgage loan will be secured.  Normally, this is carried out by a surveyor who visits the property and they will value it for mortgage security purposes.  i.e, to make sure the value is suitable for the lender to recover their monies should the owner not pay the mortgage and they have to repossess and sell on.  The surveyor is the eyes of the lender and not usually employed by them.  The surveyor gives a valuation of the property and the lender relies on this in their mortgage calculations and offerings.  These may (or may not) compare with the valuation from the Estate Agent...

As this report is for the lender, they have no obligation to tell you what is in the report, or give you a copy! Therefore you should always consider the benefit of an independent survey on the property you are purchasing to ensure all defects are noted before signing contracts. There are a number of types of survey available, aside from the mortgage valuation, however the main two tend to be:

Homebuyer Report - a standard format set out by RICS (Royal Institution of Chartered Surveyors). This will not focus on every aspect of the property like a building survey will, but will advise on urgent and visible matters needing attention such as damp and subsidence. It may advise if items might have an adverse affect on the value of the property.

A Building Survey - an in-depth survey for all properties: listed buildings: buildings that have had extensive alterations, or of an unusual construction. The surveyor will examine all accessible parts of the property and advise on technical information: the condition relative to age: further special investigations required, and provide extensive information on major or minor defects.

In the height of 2007, many lenders used Automated Valuations Models (computer algorithms) to value the security property, rather than sending round a surveyor.  Fast forward to 2016 and we're seeing some lenders move back to this way of valuing. With AVMs, there is a huge reliance on data and an element of trust as a number of properties are not even viewed and unless the recent extension, or alterations to the property are documented in the data research, these may not be taken in to account, or increase the properties value!  These may also not pick up any issues as a more in-depth survey will, therefore consider paying the extra to get the satisfaction you are purchasing a decent property.

13 October 2016

Carpool Karaoke.....for mortgages!

The world has gone Carpool Karaoke crazy!  Celebrity James Corden has had a number of top celebrities, including Adele and Michelle Obama, in his passenger seat to sing along to an array of hits.  In celebration of our 25th anniversary, the AToM team have filmed a rendition of the Madness classic ‘Our House’ and this is available for your viewing pleasure on our Facebook page (www.facebook.com/atommortgages).  Hope you enjoy it, as much as we did filming it!! 

In other news this week, a number of new products have been launched as lenders have a big push to finish the year on a high.

Our good friends at Precise Mortgages have launched a Right to Buy range for those eligible to buy their rented property at a discounted price from their council or housing association.  Allowing up to 100% of the purchase price, this is a great offering from the lender as it also allows an element of credit issues, with some defaults and CCJs accepted (Terms apply).

Investment Properties, Buy to Lets, usually have the mortgage loan available calculated based on the rental generated by the property.  Usually this is calculated at 145% of the mortgage on a nominal rate of 5.25%.   However, new lender, Foundation Homeloans, has launched a 5 year fixed rate at 3.45% and can calculate the loan based on this rate and 125%, if buying in a limited company.  It changes to 145% if in a personal name.

Finally, a number of lenders have reduced rates for customers looking to buy a new build property.  Whether it be a house or flat, lenders will assist assuming it has the right building guarantees and will even consider if the builder has an incentive offer, such as contribution towards deposits or stamp duty.  Some of the new build properties around the area are also eligible for Shared Ownership.  This involves the purchase of a smaller share of the property, whilst renting the remainder.  Normally there is an option to purchase the remaining share at a later date.  Explore all the options available to you.