Mortgage LTV conundrum

Toenex

Hi folks,

A little background first. We've had a mortgage offer (from the Abbey as it happens) on a house. Given the price of £320K and the £224K we are borrowing we nailed a 70% LTV to get a decent rate (1.9% above BOE). The survey has thrown up some stuff including roof coverings, electrics and asbestos tiles and advising a 10K retention. However, aside advising us to get these things done the Abbey aren't bothered and haven't applied a retention. So far, so good.

We all know surveyors are careful chaps so I've had a couple of people (whom I trust to give fair assessments) to look at the roof and electrics and both agree there is work that is overdue. Also the asbestos tiles need to go which will also cost. Trouble is we will have no money left (don't talk to me about stamp duty ). OK, so just try and renegotiate the price you say. Good idea however, if the price goes down and we still borrow the same amount our LTV goes up and we don't get the our current deal. I haven't spoken to the vendor yet and suspect they won't offer to do the work but may negotiate.

Will a lender go on some deal where £310K is paid to the vendor and another 10K is used for work but 'the price'/value remains £320K? Are there any other options I'm overlooking here?

Thanks in advance

Toenex

ALP2010

Snap. I'm in exactly the same boat! Need to discuss it with the lendor 2mrw but I've got a feeling they will treat the value as the adjusted sale price, yes it's definitely a bit of a conundrum!

Toenex

Glad/Sorry to hear that! I need to talk to our advisor tomorrow anyway so I was going to discuss it with him as well. Need to get an idea on how to play this before going back to the vendor, will report back on what I learn.

getmore4less

Negotiate the price

Keep the LTV 70% the same (you get 30% of the drop in price towards repairs)

Live with the faults and save up.

If you feel the faults are critical to moving then you can't afford the place at this LTV if you have no more money.

Toenex

Them's the facts alright. Good point about the 30%. On balance I suspect the devil is in the detail and what is going to decide this will be how little work we can get away with now and how much we can plan over the next few years. Of course that will depend on what interest rates do. Don't suppose anyone has a crystal ball?