LTV: Is the value the actual price you pay or what the house is worth?

Discharged

My girlfriend and I have sold our house and bought a new build. We're moving from a two bed semi to a four bed detached, the equity from the sale gives us a 23% deposit on a house we agreed a purchase price of £208K, BUT the list price was £219,995.

The builder has been drip feeding the market 5 houses at a time and the exact same house as ours are now about £235K as the demand for them is pushing the price up week by week almost.

We've had a mortgage offer but because our LTV at £208K is 23% we can't get anything less than roughly 6%, but if we get an LTV of 25%+ we have a plethora other options.

Is there any reason why we can't say the value of the house is £220K, giving us a 25% LTV??

Wutang_2

Discharged wrote: »

Is there any reason why we can't say the value of the house is £220K, giving us a 25% LTV??

You can say its worth a billion - but its what the valuer has valued it at that counts.

lumscx

isn't that the mortgage LTV is based on the valuation of the survey, which normally won't go higher than your offer price?

Discharged wrote: »

My girlfriend and I have sold our house and bought a new build. We're moving from a two bed semi to a four bed detached, the equity from the sale gives us a 23% deposit on a house we agreed a purchase price of £208K, BUT the list price was £219,995.

The builder has been drip feeding the market 5 houses at a time and the exact same house as ours are now about £235K as the demand for them is pushing the price up week by week almost.

We've had a mortgage offer but because our LTV at £208K is 23% we can't get anything less than roughly 6%, but if we get an LTV of 25%+ we have a plethora other options.

Is there any reason why we can't say the value of the house is £220K, giving us a 25% LTV??

Discharged

lumscx wrote: »

isn't that the mortgage LTV is based on the valuation of the survey, which normally won't go higher than your offer price?

Surely what you pay for a house and what it's worth are different, example we paid £50K for the house we've sold, remortgaged earlier in year and we quoted a value of £120K and it was fine, so surely us quoting the new one at £220K would be fine, especially as the houses two doors down are selling now for £230K, by the time ours is completed in April next year they'd of gone up even more?

alias7

I agree completely with what you're saying Discharged! The same thing has just happened with me.

My father bought my apartment for me a year ago when prices were at rock bottom, they practically threw it at us for £101k. Just a year earlier these were selling for £120k, so we got a bargain. Now I am in the process of getting it all into my name, so I legally have to buy it from him.

I had 3 estate agents round to value the apartment out of curiosity, they came in at £118,000, £118,500 and £119,999 respectively. Which shows that the prices in the area have almost reached their original values again.

Because i am buying from my father, we just agreed that the purchase price would be the same price of £101k which he paid a year ago. The surveyor has today valued my apartment at £101k.

It's stupid, especially since you pay £300 - £500 for these valuations and they don't even give you a proper valuation. They basically come round, spend 5 minutes in your home and tick a box to say that its worth the purchase price.

Obviously in my case, because I'm buying from my father we could easily just lie about the purchase price. Unfortunately for you it wont be that easy, which is why it sucks.

keith1950

Hi, the house price for valuation purposes will be set by the surveyor appointed by the mortgage company at the time of inspection. If there is any delay in the sale and you need it revalueing you could pay them for a follow up survey/valuation and reapply for the mortgage. You can put whatever value you want on the mortgage application but if their valuer does'nt agree your stuffed.

smckay

alias7 wrote: »

I
I had 3 estate agents round to value the apartment out of curiosity, they came in at £118,000, £118,500 and £119,999 respectively. Which shows that the prices in the area have almost reached their original values again.

:rotfl:

The valuer may have not agreed with the estate agents but their figures are not to be trusted are they!

Hopejack

I agree that you need to think about what the lender's valuer will value it at - when getting a mortgage that is what matters.

Coincidentally, I still think that sadly, estate agents are 'overvaluing' asking prices in a lot of areas :rolleyes: As a result, there is a lot of lender's undervaluing on mortgage applications! Causing all sorts of issues for chains etc.....

Hopefully you have got a good buy - who really knows what is happening in the property market though and what will happen next year - many think house prices are due to drop again due to many factors - you can read all about them on here! On the opposite fence though, some think the market will continue to grow in strength but I don't think there is anyone out that that thinks it will rise as rapidly as it has in the past - at least not for a good while yet!

Conrad

Ask the valuer if they will increase the valuation then check the lenders criteria. Typically lenders will use the lower of price paid or value. If that's the case you will have to pay the higher price of you want a 75% mortgage. Work out the difference in payments say over 3 years to test if it's worth paying the higher price.