Remortgaging is a way to lower your interest rate, cut monthly repayments, or release equity from your home, whether you’re moving to a new lender or going with your existing provider through a product transfer.
Before any new deal is approved, however, lenders need to establish the current value of your property. This helps them assess risk and decide which products they offer you, and is what’s called a remortgage valuation.
In this guide, we’ll explain what a remortgage valuation is, how it works, and why it’s so integral to the remortgaging process.
Table of Contents
What is a remortgage valuation?
When you apply to remortgage, the lender has to confirm how much your property is currently worth, a remortgage valuation is the process they use to do this in that it ensures the home provides sufficient security for the loan.
If repayments were ever to be missed, the property must be valuable enough to recover the outstanding balance through a sale, so a valuation allows the lender to assess risk in this way.
Remortgage valuations are generally far less detailed than surveys carried out when buying a home. In particular, the valuer won’t carry out an in-depth inspection, as the focus isn’t on the condition of the property but on its market value. Because of this, a valuation is conducted for the lender’s purposes primarily, rather than to highlight issues for the homeowner.
Why are remortgage valuations needed?
Remortgage valuations are central to determining the mortgage deals available to you due to the fact that they give lenders an up-to-date property value figure, which they use so as to calculate your loan-to-value (LTV), i.e., a measure of how much you want to borrow compared to what your home is worth.
The lower your LTV, the less risk you pose to the lender, in turn translating to a bigger choice of products and better interest rates. If your LTV is higher because your property hasn’t increased in value or you have limited equity, then your options will be fewer, and the cost of borrowing could in fact rise.
Valuations therefore serve a dual purpose. Namely, they give lenders confidence that the mortgage is adequately secured, and likewise help homeowners know where they stand. If your property has grown in value, a new valuation will significantly improve the terms available to you, which is especially important if you want to remortgage to release equity to fund home improvements, for instance.
What does a remortgage valuation involve?
The way a remortgage valuation is carried out differs depending on the lender and the level of risk involved. Sometimes, no visit is needed at all, and the lender will instead use a desktop valuation, this entailing using recent local sales data and property information held online to estimate your home’s value.
Alternatively, a surveyor will carry out a brief assessment in person, which would be a short (15-30 minute) visit to the property or a simple drive-by inspection that only considers the exterior.
The lender decides which approach to take. Properties that are unusual in design, built with non-standard materials, or located in areas with limited recent sales data are more likely to require a physical inspection. Regardless of the method used, a valuation focuses on the property’s size, type, location and overall condition, alongside comparable recent sales.
What happens after a remortgage valuation?
Once a valuation has happened, the surveyor then submits their findings directly to the lender. If the figure backs up your remortgage application and no concerns are raised, things will move ahead without delay.
Occasionally, valuations come back lower than expected, known as a down valuation, and it will affect the terms of your remortgage. In response, the lender could adjust the interest rate on offer, reduce the amount they’re willing to lend, or ask you to reconsider your application altogether.
There are several reasons a property might be valued lower than anticipated, including an overly optimistic estimate provided during the application, evidence of structural issues, or a lack of comparable recent sales at the price requested.
If you do get a down valuation, you should request a copy of the valuation report, since reviewing this means you’ll understand how the figure was reached. If you think the assessment is inaccurate, you’ll be able to challenge it by providing strong evidence, such as recent sale prices of similar properties in your area which you believe to better reflect your home’s value.
How to prepare for a remortgage valuation
A successful valuation starts before the surveyor arrives, that is, when submitting your remortgage application, you should base your estimated property value on evidence rather than guesswork. Recent sale prices of comparable homes in your area, ideally from the last few months, give you a realistic benchmark. In this context, local estate agents will offer useful insight into current market conditions.
On the day of a valuation, presentation still matters. Though valuers aren’t judging décor, a tidy and well-organised home makes it easier for them to properly assess the property in question. As such, clear access to rooms, good lighting, and a well-kept appearance all help the process run smoothly.
And, if you’ve done improvements such as extensions, loft conversions, or major renovations, make sure these are pointed out. On this point, valuers focus on the property as it stands now, so only completed work will be considered, meaning prospective upgrades won’t be taken into account.
Get expert advice before your remortgage valuation
Despite all we’ve said, you shouldn’t overthink remortgage valuations. Your priority should be getting the right advice and having a broad view of the market so that you find a deal which suits your individual situation.
Our comparison tool lets you compare remortgage deals from lenders across the UK. Rates are refreshed daily, enabling you to look at competitive products and narrow down the ones that match your circumstances.
Moreover, our advisers are on hand to offer tailored support when you’re ready to take the next step. Through taking the time to understand your finances and plans, they’ll help you choose a remortgage that genuinely works for years to come.
If you’re after a bit more transparency, then reach out. We’re here to simplify the process, explain your options in plain language, and help you move forward with confidence.
FAQs
Remortgage valuation fees vary based on the value and type of your property, equating to anywhere between £250 and £1,500, although the cost is sometimes covered by the lender as part of their package.
If the lender uses a desktop valuation, the assessment will be completed within one to three working days. Where a physical inspection is required, an appointment is normally arranged within around a week, with the valuation report following shortly afterwards.
No, your lender organises the remortgage valuation and appoints a surveyor themselves, so you won’t need to find anyone independently as part of the process.
A remortgage valuation is a quick assessment which focuses solely on a property’s market value, whereas a full survey implies a more detailed inspection to discern potential defects.
About the Author:
Matthew Stevens
Matt is a top contributor at Speedy Remortgage and has worked in the financial services industry for over a decade now. Through his expertise on mortgage and remortgage has helped hundreds of customers to achieve their property goals.