Re-mortgage merry-go-round

Two months ago we came off our crazy low mortgage rate onto the standard variable rate, which meant an increase of 6.5x on what we'd been paying. We had our broker on the case to try and sort an improved rate and had a bank valuer over. Long story short - the valuation came in £9K below what we needed it to be. The goal was to prove that the mortgage we'd borrowed was 75% of the value of the house. That magic 75% meant a drop in the interest rate so it was worth pursuing.

£9K isn't a massive discrepency and I'd met a valuer socially who said all banks have a £10K margin of error anyway. Just to be on the safe side we got two local real estate agents to provide comparables - which are examples of similar properties under offer or recently sold in the same (or very near) postcode. We ended up with five comparables plus a statement from the agents that our property was worth at least £40K more than what the valuation came in at.

The bank wouldn't budge and took a leisurely five weeks to let us know. NB we are not borrowing any more money, we have the same sized mortgage as before, we just wanted the better interest rate.

Sod that. We went to another bank. Despite the hasty patch up job on the ceiling the new valuer was a true gent. We showed him updated comparables and a recent quote for our house from Keatons and his valuation came in the very next day £45K more than the last guy.

I can't thank Debby from Keatons enough: we bought this property (and our last one) from Keatons and despite not being able to earn a penny from this transaction she provided comparables twice, and wrote a letter stating her professional valuation of our house to help us. It's not often you can really recommend real estate agents but here's one to contact if you're looking to buy or rent in Hackney!

Oh and with our new valuation, this means that we're able to get an even better rate of interest as our mortgage is now 70% of the value of the property - result :)

Re-mortgage fun

Hello spring, about freakin' time. London seems to have been suffering from the mother of all deluges for what feels like weeks and now we've had two consecutive days of blue skies. The park is popping with flowering bulbs and it's nice to cycle without having to wear horrid waterproof tent trousers.

Spring is about the nicest thing to happen this week. I am suffering from a comedown - Depeche Mode's Tour of the Universe is now over and I only got to see them five times. Pictured at top is the side view from the front row of my box seat at the Royal Albert Hall a couple of weeks ago.

And as of yesterday our mortgage went up six and a half times.

Yeah it's a massive sum compared to what we've been paying, but it's still lower than it was when we actually bought it, so I'm trying to look on the bright side (AARRRGGGGGHH). Mind you, we could knock nearly £200 off a month if we can get the bank to reassess the valuation it gave us by a relatively teensy sum (within the £10K "margin of error" apparently).

The problem is 1. our mortgage broker is leaving her job next week and 2. there's a massive backlog at the bank.

Hopefully this will be sorted very soon. In the meantime, the babysitter has been cut to two nights per month and it looks like our Easter holiday will be spent in the vicinity of the house (AARRRRRRGGGHHH).

And breathe.

Downstairs wall update

This is a white expanse of wall. And it may look like the most boring thing you've seen in a while but if you scroll back through these posts, you'll see that this used to be home to a rusty, ancient boiler. The Polish builder managed to get it looking pretty good, though it will need proper plastering at some point to make it super smooth. In the meantime, the only reminder that the boiler was there is the old power point to the top left of this photo, and that will be replaced with a less noticeable face plate sometime in the next millennium.



The rest of the room looks like the photos above and below - even on a grey, overcast day there's loads of light. The whole motivation for moving the boiler was to increase the value of the property - and reduce our massive gas bills - and the valuer came around this morning. Unfortunately bank valuers are somewhat more conservative than real estate valuers so we're sitting tight and hoping that the figure he comes up with will allow our new mortgage rate to be something reasonable... it's all based on how much we owe vs how much the house is worth. We should know in the next couple of days.

Swings and roundabouts

Evidence of the cold here, yes, that's snow. And below are the mattresses which are making a reappearance as the temperatures plummet. Last week we had to replace the dryer as the one that came with the house gave up the ghost, and this week we've had to replace the washing machine. Both these items together cost nearly £600 which (of course) we hadn't budgeted for. On the good news side, we were told today that our bill for the rest of the glass on the extension was going to be £300 cheaper, thanks to the 2.5% reduction in VAT. For anyone not in the UK, the VAT reduction is supposed to give the economy a kick start but I'd poo-pooed it as it seems such a paltry amount when buying day-to-day items, but when you're spending thousands 2.5% does make a difference! Our mortgage looks set to tumble too, it's already almost half what it was when we took it out in February. There's light at the end of what seems like a very long expensive tunnel...

Fonzwulli & mortgages (again)

Saw this furniture at the ICFF. Made by a guy called Fonzwulli - he doesn't have a website (yet) but here's his phone number if you're in the USA and you need some quirky, handmade furniture: Tel 1-845-343-0900. Must admit it was quite humbling to actually talk to someone at a stand who designed and made their own stuff, and who then was right there selling it. I felt bad that my own bedroom storage options are all mass produced items from Ikea or Habitat.

In the news today is the story that house prices have had their largest fall since 1991, 2.5%. Where do I start? If valuers are deliberately down-valuing houses to try and stop people from getting mortgages then yes, their value will be recorded as lower. Down-valuing prevents people from getting mortgages because vendors are unlikely to drop the price to match the valuation (as happened to us with our new property, which came in £45K below the asking price) so unless you have the extra funds to pay the difference between what the bank will loan you and what the vendor wants, you can't buy.

Secondly, 2.5% off a £400,000 home (which is not an unreasonable price for a house in central London) is £10,000. People are reluctant to list their properties because they think that they'll lose £10K, and buyers are sitting tight while believing all this media hype about falling prices, but come on, who the heck actually pays the full price? We got our new house for £15K below the asking price back in October! [NB it's nearly June so you can imagine my frustration] Though after the valuation (see above) I would've liked to have gotten it for much less. And our current flat (which was bought six years ago) cost us £7,000 less than the asking price.

And to all those doom and gloomers who bang on about "negative equity": you'll only lose if you sell your property for less money than you owe on your mortgage, so if you are facing negative equity, don't sell it.

It looks to me that the mortgage industry has perpetuated it's own implosion - by making it difficult for people to get mortgages and buy properties there will be fewer sold. This isn't to say that there aren't homes available to buy (there'll always be someone who gets relocated/divorced/dies/falls on hard times etc) but there are fewer people out there who have the approved funds.

Mortgages and quotes

More lights from the ICFF. And I swear that's another Vernor Panton second from the left.

This week has been full of tiny highs and near misses. Firstly, our current flat's mortgage rate is going to expire. In exactly three days. Three weeks ago our lovely mortgage broker Claudia - who's had the patience of a saint and the determination of a starving rat - started sourcing a new mortgage product for us. (I'm really getting into the financial services jargon).

Two weeks ago she found the "best rate on the market" which was a squeak inducing .89% more than what we're paying now. Cue argument with hubby about why he didn't listen to me two years ago and fix for longer in the first place yada yada.

Last week we had the valuation guy around to measure up our flat so he could make sure the new bank wasn't loaning us a silly amount of money. We were absolutely convinced that it would be a shoe in as friends sold their smaller flat 5 minutes walk from ours last year for £40K more than what we think our flat is actually worth. Oh how wrong we were. There's a "credit crunch" on so all valuations are coming in way below "market rate". Our valuation was 13% below what we thought it was worth, and therefore the new bank was nervous about giving us the loan. Brilliant timing huh? Here we are paying out TWO mortgages in London and they want to quibble about whether we can afford a hike at this point? Ha!

Plan B was to show them comparable sales figures of similar flats sold in the last three months to prove that their valuation was based on fiction. Claudia rang loads of real estate agents to be told that hardly anything's sold in the last three months because of the "credit crunch". Catch 22 anyone?

Yesterday hubby rang our existing bank and by some miracle secured a rate lower than the one the new bank was offering us. So for a set up fee, an application fee and now a high payment next month for being too close to the deadline, we are back in business. It feels like money is evaporating when we haven't actually purchased anything new.

Secondly, we've found another two builders to quote. This could be good in that it stops us being held to ransom by only having one option to pursue, but it could be bad in that one is a friend and I've heard that you should never employ friends. Sod it, we'll employ anyone who can renovate our house this side of Christmas.