Low- Medium LTV

spud2212

Hi,

Just a quick query about LTV & deposits

If your buying a house for £50K but its worth £90k So you have a LTV of 55.55%.

So if i look for a mortgage say MAX LTV 70% do i still need a deposit??

opinions4u

spud2212 wrote: »

If your buying a house for £50K but its worth £90k So you have a LTV of 55.55%.

So if i look for a mortgage say MAX LTV 70% do i still need a deposit??

70% of £90k is £63k. So unless I have completely misunderstood your question you need a £27k deposit.

Perhaps you should explain how you are buying a £90k house for just £50k .... as there are a number of potential issues around capital gains tax and mortgage fraud likely to arise.

spud2212

the house i want to buy is valued @ 90K.

As the house is owned by family emigrating they only want 50K

So i have a LTV of 55% so i didnt know wether i had to still put a deposit down

its a council house they purchased in 1997 for £14 k outright so theyre still making but as there only nephew and have no kids of there own am spoilt by them.

beecher2

Your LTV will be calculated using the figure you buy it for, ie 50k. You need a deposit of 15k to have an LTV of 70%. As far as I know gifted deposits are only allowed between family members but someone else with more knowledge will no doubt tell you more.

GMS

Lenders will use the LOWER of the Purchase Price or Valuation for calculations.

Exceptions are family gifted deposits, Right to Buy, and Sitting Tenant purchases.

Soem lenders will allow a deposit contribution from the vendor but generally a maximum of 5%.

If you buy a 90k house for 50k you can borrow x% of the 50k, not the 90k. You would still need a deposit