What happens if the valuation comes back with a lower valuation than you were expecting? Well for purchases this can mean that price negotiations need to start again!
For remortgages this will change the loan to value ratio. In a worst case scenario the lender may now not give you the remortgage figure you were hoping for.
It may raise issues that maybe the house has some potential problems, such as timber, damp, electrical, trees, drains etc. With a purchase you will expect the seller to either put these things right or at least meet the cost with a price reduction.
For really bad problems which will cost a lot of money the lender may impose a retention. This means that for example if the mortgage applied for was £80,000 and the cost of the work is estimated at £5,000 then they will only advance £75,000 with the remainder being released after the work has been carried out.
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