I’m not particularly impressed this evening, I have to say. My wife and I have been trying to arrange a new mortgage, having been on a standard variable rate for the last year or more after our fixed term ran out. (Actually, while we’re on the subject of “not impressed”, the SVR on our existing mortgage fell by only 0.25% while interest rates fell by a full 4%. It’s laughable, particularly as we all know that as soon as interest rates rise again, the mortgage rates will immediately go up with them). We applied for a new mortgage with an amusing new feature on application: a non-refundable administration fee. Yes, even if the application failed, we’d lose £200. It seemed like a bit of a gamble, but since the mortgage we were applying for was the best value one out there, and we were confident of our house getting the required valuation, we went for it.
We were subsequently asked to provide evidence of our earnings and copies of our bank statements, which we happily provided, and at that point we were informed that someone would be round to value our property. In order to check that the gamble was a fairly safe bet, we’d actually had an estate agent come and look at the house a few weeks ago. He confirmed that if we were to sell the property, it could go on the market for easily the value we were looking for. Aceness.
So today the valuer came round. Apparently (my wife saw him, not me) he was an old man with little knowledge of the area we live in, and rather than the hi-tech laser tape measures that estate agents now carry, he had the ancient variety. The man asked my wife what valuation we were looking for, and that if he was only a couple of thousand away from that, he’d raise it to that figure. Everything was looking good. He barely took any measurements or anything, just had a quick look round and then went away again. So there seemed to be nothing to worry about. Since my wife and I bought the house, it’s been transformed. There’s a new bathroom and basically a complete new upstairs, new carpets, nice decoration replacing the horror show we moved into, formerly exposed wiring now in the walls… the list of improvements goes on.
But as the opening sentence of this blog entry doubtless hinted at, things haven’t gone entirely according to plan. The valuation in fact came nearly £3,000.00 under what we needed to get the mortgage. After doing a bit of internet research, it became apparent that the valuer had done a simple postcode search, found a property in our area that was selling for a certain value (for a postcode which covers a very large variety of areas and house prices, and that’s notwithstanding the fact that our house isn’t directly comparable to anything on the market in our area) and based his decision on that. It’s ludicrous. It’s wrong. It’s shoddy.
So despite doing everything right, we’ve lost a couple of hundred quid and have no new mortgage to show for it. Impressed? No. Actually rather angry. There is an appeals process, but it seems rather loaded in favour of the original result. I understand why a non-refundable application fee might be seen as a good idea, as it’ll discourage fly-by-night idiots from wasting the mortgage company’s time, but we’ve provided all the evidence required that we’ve never missed a mortgage payment, that we can afford the new mortgage (which is extremely similar to our existing monthly payments), and our house is much better now than it was when we bought it. Needless to say, our financial adviser was very apologetic and surprised at the result. As far as I’m concerned, while I’m disappointed by the silly valuation, I’m much more pissed off about the administration fee as it now seems like a complete con.
My wife and I are currently considering our options. By the way, the mortgage product belongs to Nottingham Building Society. So if you’re thinking of getting anything from them, watch out.