Mortgage Valuation Query

madmish00

Just wondering about mortgage valuations and the effect on LTV of the mortgage.

For example we have made an offer of the asking price £169,950 on a property and will be putting down 34k keeping it just under the 80% bracket on LTV.

However (I know it is not accurate...) Zoopla shows the current estimated value of the property at £190k.

What happens to the LTV is the mortgage valuation is done and comes back that the property is worth higher than we are paying? Is the LTV worked out on the valuation of the property or the price we pay for it? E.g if it came up at 185k then the total borrowing would only be 73.48% instead of 79.99% and we would then fall into the next bracket down for products available

JQ.

I'd be shocked and amazed if the valuation came back more than the purchase price, as the valuer will be told what you're paying.

If I was paying 100% of the asking price I'd be more worried about the valuations being below the purchase price, unless of course the marketing price was very very competitive.

hazyjo

Zoopla is nowhere near accurate on valuations ('valued our purchase' £150-200k over what we're paying!). Search for 'zoopla', 'valuation' and 'rubbish' on here and you'll see tonnes of comments.

Jx

madmish00

I know Zoopla isn't accurate - it isn't just that I am relying on for thinking it is undervalued. Their are several semi-detached properties on the same estate that have sold for between £155-£165k recently. The property we are looking at is an extended detached with much more land than any of these other properties. There are also other detached houses elsewhere on the estate for £215k (though I think these are overpriced)

I suspected the valuer may just come back with what we are paying as they are acting for the lender rather than us but was just curious as to whether it is in fact loan to value or loan to purchase price.

kingstreet

madmish00 wrote: »

I know Zoopla isn't accurate - it isn't just that I am relying on for thinking it is undervalued. Their are several semi-detached properties on the same estate that have sold for between £155-£165k recently. The property we are looking at is an extended detached with much more land than any of these other properties. There are also other detached houses elsewhere on the estate for £215k (though I think these are overpriced)

I suspected the valuer may just come back with what we are paying as they are acting for the lender rather than us but was just curious as to whether it is in fact loan to value or loan to purchase price.

Purchase price, or valuation, whichever is the lower.

A surveyor will not tell you if he thinks the property is worth more. He is simply confirming if the property is worth what you are paying and does it offer good security for the mortgage.

madmish00

Thanks for the replies. I suspected that would be the case.

Out of interest if we got an independent valuation done would this make any difference?

kingstreet

madmish00 wrote: »

Thanks for the replies. I suspected that would be the case.

Out of interest if we got an independent valuation done would this make any difference?

Nope. Only the lender's valuation is going to count for the calculation of the LTV for the mortgage product.