Mortgage top up, bank screwing us over?

MarcusP12

Hi guys,

Need to vent and or get a bit of advice. First the background.....we bought our house back in 11 and seems to have turned out to be a good decision as we believe we have a significant amount of equity in it now. So we have wanted to extend and refurbish for a while now and with the surge in property prices and our growing family means now is as good a time as ever.....we are both in secure good jobs. My wife is well paid and id be considered very well paid and have good savings...so we felt we had a very strong application and even though we didnt need to, we applied for the max amount to preserve as much of our savings as possible. We didnt expect to get the full amount becuase of the new 80% loan to value....

We have our builder ready to go so wanted a quick turn around in the bank side of things. So, even Though it is not required until after you get your sanction in principal, we went ahead and got the house valued and sent it on before we got the sanction of principal officially, such with how confident we were with our financial position. We were very happy with the valuation as it suggested that we should get the amount we needed based on the valuation with the work done which was based on a property around the corner which was sold late last year. We should note that we are in a very desirable part of the city.

So heres the thing, the bank got in touch to say theybwere happy to top us up but only by 110k (we applied for 155). The reason they werent giving any more is because they dont accept the valuation.the top up basically suggests that the house will be worth no more than the house around the corner even though it is smaller in living area than ours will be by 40m2, was a refurb job (we would be upping the ber signifantly) and was sold q4 last year and by the time the works are done we will be at least 6 months further on in a rising market all be it slowing down but in a vety much sought after area of south dublin.

This has really irritated me as we now have to dip into our savings more han we had planned for no logical reason. We are lucky that we have the savings such that we can still get most of the works done with a few savings here and there. What i dont understand is what is the point of getting an independant valuation from a valuer on their own panel if they are not going to accept it or even revert back for a reconsideration of it? What really bugs me is that they may think the valuation is optimistic but even if they had met us half way on the figure it actually would have nearly covered the amount we are going to end up spending when we factor in the savings which are now forced on us by the lower top up. They are just ignoring the valuation and suggesting that a significantly bigger house with higher ber, converted attic and higher spec internal finish is worth no more than one sold 6 months ago. Nonsense.

The second thing that bugs me is, what wouldnthey have sanctioned if we didnt have the valuation up front? Yu dont need it until after so how would that have played out? Would they have offered a higher amount (i dont believe our ability to repay the extra would have been a factor) and then rolled back when they got the valuation report?

Another thing that concerns me, and maybe i took it up wrong but if you are looking for a certain amont for the build and the bank only gives you x amount then you have to top up the build costs yourself.fair enough obviously but they draw down the shortfall, e.g. From savings, first and then the top up mortgage theyre sanctioning. So, where does that leave me with the lower top up? We looked for 155 and have the boq to support this but only got 110 from the bank so does that mean they will draw down 45k from our savings before they dip into the 110 they have sanctioned first, even though we intend to revise our budget down to say 135 to 140?? Surely that cant be right? Surely i dont have to resubmit an application for the revised amount and drag it out further??!surely its at our own discretion to spend more thsn the top up if it doesnt materially affect the valuation which they have ignored and basically suggested that the works done wont increase the value of the house anyway!

Im really annoyed at their decision and am wondering if anyone has had similar experience that they addressed with the bank? Is there any point in appealing or taking it any further? As a minimum im going to complain to someone about it and demand that they refund me my costs for the valuation. I dont see why i shouldnt get some kind of opportunity to discuss this with someone.

I accept tha we'll have to plunder the savings to get the works done and thats ok but i just really dont like the decision making process by the bank. Id sooner they came back and said we dont think you can comfortably pay back more than the 110 after stress testing. At least we wouldnt have forked out 150 quid to find that out!

Any thoughts are appreciated.....