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interestrateripoff

Will A Mortgage Lender Value Your Home As Much As You Do?

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Finally got around to scanning this in. This was in Sundays Mail.

Interesting issue would lenders deliberately undervalue a house to force you onto a higher rate.

Before you might have been able to shop around for a better deal, maybe not so now.

A nice way to get the profit margins up, sorry you don't qualify for a cheapo rate as you house now exceeds LTV.

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dailymail.jpg

Finally got around to scanning this in. This was in Sundays Mail.

Interesting issue would lenders deliberately undervalue a house to force you onto a higher rate.

Before you might have been able to shop around for a better deal, maybe not so now.

A nice way to get the profit margins up, sorry you don't qualify for a cheapo rate as you house now exceeds LTV.

Nonsense! In Aberdeen the prices are going only up, including the bank valuations.

If you do not believe me ask McTwat ...

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God what does this do to my credibility when I keep posting whilst saying that I am stopping!

Trouble is with the good news today re troll made me think again.

Anway whilst I am thinking again thought I would post these links as they seem to link with what you are saying.

Lenders Accused of Dirty Mortgage Tricks April 2009

Halifax, Britains biggest lender, has been accused of undervaluing customers properties when they come to remortgage, forcing them on to more expensive deals.

Brokers say borrowers may see as much as 40% wiped off the value of their homes, although prices have fallen by an average 21% from their August 2007 peak, according to Halifaxs own house-price index.

And :

Surveyors are Stifling Property Recovery

Surveyors have been accused of undervaluing properties and stifling the property market recovery, according to a new analysis.

Research by the commercial law firm, McGrigors, suggests surveyors are valuing properties up to 20 per cent less than an agreed sales price. It means many buyers need to find a bigger deposit or see their purchase fall through.

The practice is also providing ammunition for gazunders - buyers who reduce their offers on properties, often at the last minute as contracts are due to be exchanged.

Edited by Sybil13

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I will the next time I see him.

I should think the demotion to Troll status will be a severe blow to his ego. :(

Still I am still sending him lots of love.

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I should think the demotion to Troll status will be a severe blow to his ego. :(

Still I am still sending him lots of love.

As I am to you. Don't stop posting ;)

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Hi

Amazing that the journalist felt he had to explain how to calculate a percentage!

M21er

It's a fact that 173% of the UK population don't understand percentages, so it's not surprising it needs explaining.

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Brokers say borrowers may see as much as 40% wiped off the value of their homes, although prices have fallen by an average 21% from their August 2007 peak, according to Halifaxs own house-price index.

It makes sense to wipe out 40%:

- 20% last year

- 20% this year

20 + 20 = 40 .... simple math for me ...

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It makes sense to wipe out 40%:

- 20% last year

- 20% this year

20 + 20 = 40 .... simple math for me ...

Er not quite.

Lets say you have a house worth 100,000 first year loses 20%

Value 80000

Next year it loses another 20%

Which would be 16000 off 80000 giving you a value of 64000.

Total % loss is 36%.

Providing of course I've not screwed up my maths.

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I think the main reason is that many people just don't believe THEIR house value has fallen. I spoke to a friend the other day who is perfectly sane until she talks about house prices. She is still of the opinion that hers has risen because they have added a garage. Yes, the garage will have added value, however the 25% drop in overall prices will have more than wiped the gain out.

Maybe all borrowers should have a forced valuation to bring back some reality.

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I think the main reason is that many people just don't believe THEIR house value has fallen.

yes indeed. It amazes me how many home owners think that their own property is so special, it could not of depreciated at all in value.

And of course with all the media hype telling us how home values are appreciating in value again, only adds to their sense of delusion.

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Er not quite.

Lets say you have a house worth 100,000 first year loses 20%

Value 80000

Next year it loses another 20%

Which would be 16000 off 80000 giving you a value of 64000.

Total % loss is 36%.

Providing of course I've not screwed up my maths.

The same dodgy maths gives a 50% fall far more significance than a 50% rise.

If a 100K flat increases in value by 50% it would be 'worth' £150K if this then drops 50% it is only 'worth' 75K I am sure most of the population would think that it would have fallen back to 100K.

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Finally got around to scanning this in. This was in Sundays Mail.

thanks for going to the trouble of scanning this in for us.

Well worth a read.

These lenders are desperate to get the money in now from higher interest rates, so a rather clever way of doing so.

Still it should all eventually help bring on the next stage of the inevitable hpc.

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God what does this do to my credibility when I keep posting whilst saying that I am stopping!

Anway whilst I am thinking again thought I would post these links as they seem to link with what you are saying.

Don't bother about that credibility Sybil.... ;)

Just keep up the posting..., because as usual, your links are of interest, and relevant to the thread.

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It's a fact that 173% of the UK population don't understand percentages, so it's not surprising it needs explaining.

Don't worry - Our Supreme Leaders understanding of percentages is rising each month by 0%

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I never understand some people (that take variable rate mortgages).

They enter into a loan agreement for a significant number of years of their life, and at almost any point the lender can decide just how much they want to charge them, at will, and they don't think they could get screwed over.

If EVER I take a mortgage (getting on a bit now and home ownership doesn't interest me much now I've got an assured tenancy), I'm fixing the rate for the duration of the term. Final!

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yes indeed. It amazes me how many home owners think that their own property is so special, it could not of depreciated at all in value.

And of course with all the media hype telling us how home values are appreciating in value again, only adds to their sense of delusion.

Spot on. I only know of 2 people close to me with their property on for sale. One couple originally had it on for 480K and have chased the market down - now turning down offers of 300K. Every time I meet said seller she says 'we just haven't had the RIGHT people though the door, I know our house has something 'special' for that RIGHT person'. Having accepted an offer of 320K this spring they decided to pull out just before exchanging because 'I'm greedy, I think its worth more to the RIGHT person'. This is word for word including the greedy bit!

The other person I know chased the market down for 18 months and said exactly the same thing 'our property is special and we just need the RIGHT person'. They eventually sold when they saw sense and whopped of 1/3 of asking in one go.

Has the population become replaced with robots without me knowing about it?

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It makes sense to wipe out 40%:

- 20% last year

- 20% this year

20 + 20 = 40 .... simple math for me ...

Aparently it isnt simple maths for you!

First year = 20% x original value

Second year = 20% x (20% x original value)........ isnt 40% x original value

Edited by Neil B

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