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Based on your yearly income,
you may be able to borrow
Most lenders will let you borrow 4.5 times your annual salary so, as long as you have a standard 10% deposit, you should be able to borrow this much.
Depending on your personal circumstances, some lenders may let you borrow 5 times your salary.
Lenders usually cap the amount they lend at 5.5 times your salary, so it’s unlikely you’ll be able to borrow more than this.
What To Do When a Mortgage Survey Undervalues Your Property
If you're applying for a mortgage, and the valuation survey has come back under the anticipated value, it can throw a spanner into the works.
In this guide, the Revolution Brokers team runs through the options for what to do if you have had an undervalued survey.
For more assistance in this situation, give us a call on 0330 304 3040, or drop an email to [email protected].
How Do Mortgage Under Valuations Occur?
In short, the valuation is essential to your mortgage application, and if the surveyor feels that the property isn't worth what you are paying for it, the lender might withdraw an offer to lend.
There are many reasons why this happens, but it is critical for a lender that they don't lend you more than they could sell the property for were it to be repossessed.
Valuations look at other property sales nearby, and the condition of the property in question.
Some of the most common issues are around damp, and subsidence.
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What Can I Do if a Mortgage Survey Under Values the Property?
There are still several options, so this doesn't necessarily mean that the entire purchase will fall through!
Here are some of the most popular options:
- Renegotiate the purchase price. If you have an independent survey that indicates that the property isn't worth the sale price, this gives you significant leverage to ask that the price be renegotiated.
- Appeal the valuation. Should you feel that the valuation is unfair, and can provide evidence of similar properties selling for a comparable price in the last six months, you can appeal the valuation outcome.
- Change lenders. Mortgage providers all use different surveyors and have different policies, so you might find that simply switching your application elsewhere will solve the problem. However, it's best to understand what credit checks have already been run and whether there are any costs involved in cancelling your existing application.
An independent broker can be a life-line in this sort of challenging situation - get in touch with the Revolution Brokers team, and we will be happy to work through the options with you and decide on the best plan of action.
Does an Under Valuation Mean the Lender will Withdraw my Mortgage Offer?
Not necessarily - but a lot depends on how much you were looking to borrow, how significant the change in value is, and what size of deposit you have available.
Lenders will offer a maximum Loan to Value, i.e. a percentage of the purchase cost. Therefore if the valuation drops substantially, they might not be able to provide a similar value.
As an illustration:
- You are buying a property for £250,000 and have a £50,000 deposit.
- The valuation comes back at £230,000, and your lender has offered a mortgage up to 80% of the property value.
- You can borrow a maximum of £184,000 (80% x £230,000) and now have a shortfall of £16,000 against the value you need to borrow.
In this situation, the seller might agree to drop the sale price to £230,000; you could find a lender who offers a higher LTV or increase your deposit value to go ahead with the purchase.
Can I Still Remortgage if a Surveyor Under Values my Home?
Usually, yes - and the options for a remortgage are similar to those for a property purchase.
You might remortgage with a different lender, whose surveyors return a different valuation, negotiate the amount you wish to borrow, or appeal the outcome if you believe it is incorrect and can show that the original value was accurate.
Mortgage Valuation Advice from the UK Experts
Getting a property valuation back and finding that the value is not what you expected can be stressful.
In this situation, it is vital to seek expert advice to ensure that your plans are not entirely derailed and explore the most straightforward options to go ahead with the borrowing.
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As specialist mortgage brokers for a huge variety of applicants, the whole-of-market consultants at Revolution provide access to an exceptional range of lenders, products and mortgage deals. That means you get the advantage of professional negotiation and broker-exclusives through an established lending network to ensure we always find you the most competitive mortgage available.
The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature.
We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.