Help, my lender undervalues my house!

Q I have a mortgage with an outstanding balance of £74,000 and a second loan secured against the house of £35,000. I wanted to remortgage to clear the second charge which would reduce my monthly payments by £600 a month. My current lender said I could not do this as my house was not worth enough – it has been valued at £96,000 (it was worth £145,000 two years ago). I disagreed with this, and got two independent estate agents and a well-known mortgage company to value it. They all said it was worth £125,000. I challenged my bank, but they said they were sticking to their original figure. They said that if I wanted them to do a full survey and valuation I would have to pay £300, but it was unlikely they would increase their original valuation by much, if at all. Is it usual for current mortgage lenders to down value your house if you remortgage with them, and if so would I be better changing lenders? Withint the next month or two I am not going to be able to continue with these payments. I was going to go with another lender and take out a 90% loan-to-value mortgage which would have saved me £500 a month. However, to do this I had to pay a fee of £1,500-£2,000 rather than adding this to the loan to keep the LTV at 90%, so have been unable to go ahead. CW A All lenders keep track of how much the homes on their books are worth, and as house prices have fallen it is no surprise the lender's valuation of your home is lower than it was when you first took out a mortgage. A valuation for mortgage purposes is not the same thing as a valuation for selling as done by an estate agent, and it is quite normal for a mortgage valuation to be lower than an estimated sale price, so I wouldn't hold out much hope of getting your current lender to change its mind. Whether you should try another lender depends on several factors. First, in order to clear the second charge of £35,000 and add it to your first mortgage of £74,000 you will need to find a lender willing to lend you a total of £109,000 – or, if you have fees of £2,000 to add to that, a total mortgage of £111,000. To keep to a LTV of 90% you need to have your home valued at just over £123,000. If the well-known mortgage company really was prepared to value your home at £125,000 for mortgage purposes it might be worth seeing if it would give you a mortgage.