What to Do When Your Property Is Down Valued by Your Mortgage Lender

What to Do When Your Property Is Down Valued by Your Mortgage Lender

Buying a property can be an exciting and rewarding experience but it also comes with its fair share of challenges.

One such challenge is when your mortgage lender down values the property you intend to purchase.

This situation can be disheartening, but it’s essential to know how to navigate it effectively.


Understanding a Down Valuation

Before delving into the steps to take, let’s clarify what a down valuation means.

When you apply for a mortgage, the lender conducts a valuation of the property to determine its market value.

This valuation helps the lender assess the risk associated with the loan.

If the lender’s valuation comes in lower than the agreed purchase price, you have a down valuation situation on your hands.

Steps to Take When Facing a Down Valuation

  1. Stay Calm and Informed:
    • A down valuation can be unsettling, but it’s important not to panic. Take time to understand the implications and your options.
  2. Review the Valuation Report:
    • Obtain a copy of the valuation report from your lender. Carefully review it to understand why the property was downvalued. Look for discrepancies or errors in the report.
  3. Discuss with Your Estate Agent:
    • Consult with your estate agent, as they can provide insights into whether the valuation is accurate or if there are factors that may have been overlooked.
  4. Negotiate with the Seller:
    • Contact the property seller and discuss the situation. They may be willing to lower the purchase price to match the valuation, or you can negotiate other terms to bridge the gap.
  5. Provide Additional Evidence:
    • If you believe the valuation is inaccurate, you can provide your lender with additional evidence, such as recent comparable sales or property improvements, to support your case.
  6. Seek a Second Valuation:
    • Some lenders may allow you to request a second valuation. However, this comes at an additional cost, and there’s no guarantee that the new valuation will be higher.
  7. Reconsider Your Options:
    • If the down valuation persists, you may need to reconsider your options. This could involve increasing your deposit, seeking a different mortgage lender, or even walking away from the purchase if it’s no longer viable.
  8. Appeal the Valuation:
    • In some cases, you may be able to appeal the valuation through your lender’s formal complaints procedure. Consult with your lender to understand their specific appeals process.
  9. Consult with a Professional:
    • It can be beneficial to seek advice from a solicitor or property expert who can provide guidance tailored to your situation.

Facing a down valuation on a property you’re buying can be challenging, but it’s not insurmountable.

The key is to stay calm, gather information, and explore your options. By negotiating with the seller, providing evidence, and seeking professional advice, you can navigate this situation effectively and make informed decisions about the next steps in your property purchase journey.

Remember that each case is unique, and it’s essential to tailor your approach to your specific circumstances.


Back to Blog