House value or market value

bazzmac

Just sold my house today (in Scotland) and called the halifax about my mortgage promise the house i'm looking at to buy has been reduced by quite a bit and I reckon it will value more than the price i'm gonna pay, when I spoke to halifax they would only base my mortgage promise on the purchase price and not the valuation price. When i've checked out mortgage rates online it always asks the house value.

If I get the house cheaper than valued then does this count as equity in the property?


My question is will they take the valuation price from the survey or the purchase price when I make my final application?

cocktail

the mortgage would be based on the valuation price--market price at the time of valuation.

beecher

It'll be based on whatever is lower - the purchase price or the valuation. Chances are the valuation will come in lower than you think.

bazzmac

Thanks for the reply guys, Iseem to be getting conflicting information though I suppose I should go with worst case scenario and go with the market value.

Soot2006

Surely the value of a house is its market value; i.e. what someone is prepared to pay for it?

Or am I missing something ...

bazzmac

Soot2006 wrote: »

Surely the value of a house is its market value; i.e. what someone is prepared to pay for it?

Or am I missing something ...

Well the house i've seen was originally on at offers over £140'000 the guy has been made redundant so reduced the price to get a quick sale, just had a bid accepted for £132,000. If the house still values @ £140,000 or more then does the lender go with this amount or the purchase price, if they go with the valuation price then it means I have more of a deposit so I can get a better mortgage deal than if they go with the purchase price. Obviously I'm looking to get the best deal.

Hope that makes sense.

unite79

Purchase price.

zzzLazyDaisy

It is the purchase price.

If you later come to sell or re-mortgage and the price has gone up, THEN yes, you will have more equity in the house.

But with there still being the potential for more falls in house prices, both valuers and lenders are being very conservative. You might be surprised at how low the house is valued (Just because the sellers were previously asking for a lot more for the house, doesn't mean it was actually worth that much).

Thrugelmir

bazzmac wrote: »

Well the house i've seen was originally on at offers over £140'000 the guy has been made redundant so reduced the price to get a quick sale, just had a bid accepted for £132,000. If the house still values @ £140,000 or more then does the lender go with this amount or the purchase price, if they go with the valuation price then it means I have more of a deposit so I can get a better mortgage deal than if they go with the purchase price. Obviously I'm looking to get the best deal.

Hope that makes sense.

and what if the valuer comes back with valuation of £128k ?

Works both ways. The valuer may identify issues which need resolving and therefore adjust his valuation accordingly.