LTV Query

Sibelius1

Hello,

Just registered as I'm moving house shortly and have a few things playing on my mind.

I live in Scotland, and have been looking at several Home Reports, including the Single Survey used by lenders as a valuation. Many of the properties I have looked at have a survey value greater than the asking price, so my query is as follows:

I am interested in a propery that is on sale for FIxed Price 200k, the survey values the property at 225k. If I make a 10% deposit, the loan is 180k. LTV for this should therefore be 80%, despite the fact I have only made a 10% deposit on the actual purchase price. Can someone please confirm this is the case?

Thanks in advance for any replies.

Cannon_Fodder

Sibelius1 wrote: »

I am interested in a propery that is on sale for FIxed Price 200k, the survey values the property at 225k. If I make a 10% deposit, the loan is 180k. LTV for this should therefore be 80%, despite the fact I have only made a 10% deposit on the actual purchase price. Can someone please confirm this is the case?

Thanks in advance for any replies.

No.

Your LTV is calculated on the purchase price, not the valuation.

If you are happy to pay £200k, and put down £20k deposit, the mortgage will be £180k, i.e. 90% LTV.

To get a 80% LTV, you either pay £40k deposit on a £200k purchase price, or if you want to, £45k on a £225 purchase price.

Sibelius1

Thanks very much for your reply.

Disappointing, but I suppose the price paid is the true value, unless it is deliberately undervalued of course.