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    • amybenjaminandemilysmum
    • By amybenjaminandemilysmum 10th Oct 16, 2:55 PM
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    amybenjaminandemilysmum
    Mortgage down valuation- now need to pay more deposit ???
    • #1
    • 10th Oct 16, 2:55 PM
    Mortgage down valuation- now need to pay more deposit ??? 10th Oct 16 at 2:55 PM
    Hi there.
    I am looking for some advice.
    We have made an offer on a house which has been on the market for 132,000. We have offered the full asking price.
    I have been given a mortgage offer by Halifax- pending their surveyors report with an 85% LTV
    My mortgage advisor has contacted me to say that the house has only been valued at 130,000 so I have put this to the vendor who has requested a copy of the surveyors report.
    However my mortgage advisor has told me that I would need to stump up an extra 1700 if I was to offer 130,000
    This is how he has explained it to me:
    Original offer = 132, 000 at 85% LTV means 19,800 deposit and 112,200 mortgage
    New offer = 130,000 at 85% LTV means 19500 deposit and 110,500 mortgage.
    But I have been told I would have to pay the difference between the two mortgage amounts which is 1700... anyone know why?
    Thanks in advance
    Amy
Page 1
    • kingstreet
    • By kingstreet 10th Oct 16, 3:12 PM
    • 30,544 Posts
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    kingstreet
    • #2
    • 10th Oct 16, 3:12 PM
    • #2
    • 10th Oct 16, 3:12 PM
    If the purchase price becomes 130,000 and you still want an 85% mortgage (or that is the max LTV Halifax will offer you) the maximum mortgage amount is 110,500 and your minimum deposit is 19,500.

    If you want to put down a smaller deposit, the LTV would then be over 85% and you would probably have to choose a new and worse product.

    I don't understand the significance of this 1,700?
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • glentoran99
    • By glentoran99 10th Oct 16, 3:15 PM
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    glentoran99
    • #3
    • 10th Oct 16, 3:15 PM
    • #3
    • 10th Oct 16, 3:15 PM
    is your advisor assuming that the vendor wont reduce price? and you are still buying at 132k?
    • kingstreet
    • By kingstreet 10th Oct 16, 3:15 PM
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    kingstreet
    • #4
    • 10th Oct 16, 3:15 PM
    • #4
    • 10th Oct 16, 3:15 PM
    If you decide to continue and pay 132,000 for the property, this is where the 1,700 appears.

    132,000 less 85% of 130,000 (lower of purchase price or valuation) is 110,500 so your deposit is 21,500, 1,700 more than your original 19,800 deposit.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • amybenjaminandemilysmum
    • By amybenjaminandemilysmum 10th Oct 16, 3:22 PM
    • 9 Posts
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    amybenjaminandemilysmum
    • #5
    • 10th Oct 16, 3:22 PM
    • #5
    • 10th Oct 16, 3:22 PM
    I asked the mortgage advice the same questions you are asking me.
    I was told:

    If you go in at 130,000 you need to find the 1700 extra and if you go in at 132,000 then you would need to find the extra 2000 (because the mortgage company (Halifax) values the property at 130000)PLUS this 1700....

    Sorry if I am being vague but the mortgage advisor isn't explaining it very well.
    • glentoran99
    • By glentoran99 10th Oct 16, 3:33 PM
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    glentoran99
    • #6
    • 10th Oct 16, 3:33 PM
    • #6
    • 10th Oct 16, 3:33 PM
    ask him to explain the 1700 extra if what you are paying is the same as Halifax's valuation?
    • kingstreet
    • By kingstreet 10th Oct 16, 3:34 PM
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    kingstreet
    • #7
    • 10th Oct 16, 3:34 PM
    • #7
    • 10th Oct 16, 3:34 PM
    As stated, if you pay 130,000 your minimum deposit is 19,500.

    If you pay 132,000 your minimum deposit is 21,500.

    This is because in each case, Halifax is lending only 85% of 130,000.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • amybenjaminandemilysmum
    • By amybenjaminandemilysmum 10th Oct 16, 3:42 PM
    • 9 Posts
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    amybenjaminandemilysmum
    • #8
    • 10th Oct 16, 3:42 PM
    • #8
    • 10th Oct 16, 3:42 PM
    Just to clarify we have now offered 130,000 not 132,000 in view of the valuation.

    A 15 % deposit on 132,000 is 19800
    A 15% deposit of 130,000 is 19500

    So why is my mortgage advisor saying I need to pay 21200 deposit on 130,000 because this is more than 85% LTV?
    • glentoran99
    • By glentoran99 10th Oct 16, 3:42 PM
    • 3,920 Posts
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    glentoran99
    • #9
    • 10th Oct 16, 3:42 PM
    • #9
    • 10th Oct 16, 3:42 PM
    Just to clarify we have now offered 130,000 not 132,000 in view of the valuation.

    A 15 % deposit on 132,000 is 19800
    A 15% deposit of 130,000 is 19500

    So why is my mortgage advisor saying I need to pay 21200 deposit on 130,000 because this is more than 85% LTV?
    Originally posted by amybenjaminandemilysmum
    Have you clarified with the mortgage advisor that you aren't paying 132k?
    • amybenjaminandemilysmum
    • By amybenjaminandemilysmum 10th Oct 16, 3:48 PM
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    amybenjaminandemilysmum
    Yes I have clarified this twice with him and he is still telling me the same thing.
    • kingstreet
    • By kingstreet 10th Oct 16, 3:51 PM
    • 30,544 Posts
    • 16,261 Thanks
    kingstreet
    Just to clarify we have now offered 130,000 not 132,000 in view of the valuation.

    A 15 % deposit on 132,000 is 19800
    A 15% deposit of 130,000 is 19500

    So why is my mortgage advisor saying I need to pay 21200 deposit on 130,000 because this is more than 85% LTV?
    Originally posted by amybenjaminandemilysmum
    The purchase price doesn't dictate the loan amount. The valuation does. So if you pay 132,000 on a property worth 130,000 the maximum mortgage is 85% of 130,000 or 110,500. Then you need 132,000 - 110,500 = 21,500 deposit.

    Now the purchase price and valuation are the same at 130,000, the deposit is 15% of both those figures, 19,500.
    Last edited by kingstreet; 10-10-2016 at 4:08 PM.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • amybenjaminandemilysmum
    • By amybenjaminandemilysmum 10th Oct 16, 4:46 PM
    • 9 Posts
    • 2 Thanks
    amybenjaminandemilysmum
    I think we are near to resolving this confusion.

    My husband has spoken with the MA who admits he has calculated things incorrectly and that we would only owe 300.

    I STILL think the MA has got things wrong. IF we purchase at 130,000 I would need 300 less in my deposit as it would be 19,500 not 19,800.
    • glentoran99
    • By glentoran99 10th Oct 16, 4:48 PM
    • 3,920 Posts
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    glentoran99
    I would change mortgage advisors, he doesn't seem the brightest
    • kingstreet
    • By kingstreet 10th Oct 16, 4:52 PM
    • 30,544 Posts
    • 16,261 Thanks
    kingstreet
    Using the absolute figures for the correct scenario is a lot easier than using the differences between one scenario and another.

    Tell your advisor to change the purchase price to 130,000 and the mortgage amount to 110,500. The Halifax system works out the deposit itself.

    Then all you have to do is hand the right money to your solicitor.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
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