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LTV% of purchase price or valuation amount?

m_k_dons
m_k_dons Posts: 76 Forumite
in Mortgages & endowments
Sorry for the (stupid?) question but..

Let's say someone was to agree to purchase a house for (£A) roughly 20% less than the original asking price (£B), which let's assume was a fair price at the current time but which the buyer wouldn't pay due to the fear of further market drops.

When the house was valued for the bank the LTV% be the mortgage amount (£M) divided by £A or by £B.

Does this make sense?

Thanks.:confused:

Comments

  • payless
    payless Posts: 6,957 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Unless the seller is purposly selling below value - ie to a family member, then its likely the agreed price ( not asking price0 would actually be the fair price in current market anyway - and the lender would assume this
    Any posts on here are for information and discussion purposes only and shouldn't be seen as (financial) advice.
  • Soot2006
    Soot2006 Posts: 2,184 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    £A

    Google "Vendor Gifted Deposit"
  • Sonofa
    Sonofa Posts: 300 Forumite
    The only tangible 'value' on which the LTV % can be based would be the purchase price surely?
This discussion has been closed.
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