Advice on LTV please.

kidcat

Hi, Just have a quick question that I am hoping someone can help with.

We are currently considering buying a house and looking into mortgages etc.
I am reading all the different bits and am slightly confused by the whole LTV thing.

So can anybody tell me, whether if we buy a house for example at £100K and have a 10% deposit for £10K, but the valuation comes in at £120K. Is the 90% mortgage based upon the actual price of the house or the value placed by the valuer?

yelf

Valuers value

Cannon_Fodder

Whichever is the lowest of price or valuation.

If the seller agrees a price, even if lower than the valuation, then why pay more...

On the other hand, Joe Public don't really know values, they agree to pay what their "gut" tells them, so if a valuation comes in lower than the asking price, lenders will only lend according to the valuation, to protect their interest in the property.