Shared Ownership - Valuation Issues - Whos right - HA or Surveyor?

Graham_Devon

FTBLondon, I'm not quite sure what you still want to know.

The HA is unlikely to reduce the price. If you buy you will be in 50k negative equity straight away.

It's up to you. If you can't get them to reduce the price, and you still want to buy, you'll need to find 50k outright, in cash.

No sane person on here is going to tell you this is worth getting into. And this comes from someone in Shared Ownership himself. I'm of the feeling this is more of a wind up post for attention than anything else.

FirstTimeBuyerLondon

Hi Graham,

I totally agree with you regarding the negative equity, but my question was to do with the information I found advertised on their website where the layout is the same as mine is £230k. Should I raise this with the HA now or should I wait for them to come back to me with a new offer?

Yorkie1

I'd wait to see what they come back with before mentioning it.

But even if they come back with £230K, that's still £30K over what your mortgage lender values it at and therefore will base any lending on and you'll still be in negative equity.

pioneer22

Who would give you a mortgage if its that overpriced?

FirstTimeBuyerLondon

Yeah I know Yorkie. I have currently set my limit to £210k, so from a shared ownership point of view would have to contribute an extra £2k more to my deposit. I know its £2k, but at present there is nothing else I can afford :-s

Yorkie1

FirstTimeBuyerLondon wrote: »

Yeah I know Yorkie. I have currently set my limit to £210k, so from a shared ownership point of view would have to contribute an extra £2k more to my deposit. I know its £2k, but at present there is nothing else I can afford :-s

It's only an extra £2K from you if the lender agrees to change their valuation to £210K and is satisfied that you can afford the repayments on that increased amount.

If the lender refuses to budge, it's an extra £10K deposit from you.

Graham_Devon

FirstTimeBuyerLondon wrote: »

Yeah I know Yorkie. I have currently set my limit to £210k, so from a shared ownership point of view would have to contribute an extra £2k more to my deposit. I know its £2k, but at present there is nothing else I can afford :-s

It's not 2k.

If the lender is only prepared to lend 200k, anything over that has to be found by yourself.

And the deposit will not count. You still need to keep your deposit at whatever percentage was agreed for the mortgage.

So in this case, you'd need to find 10k on TOP of your deposit.

FirstTimeBuyerLondon

Graham_Devon wrote: »

It's not 2k.

If the lender is only prepared to lend 200k, anything over that has to be found by yourself.

And the deposit will not count. You still need to keep your deposit at whatever percentage was agreed for the mortgage.

So in this case, you'd need to find 10k on TOP of your deposit.

But if the lender values the property at £200k and I am purchasing 40% then my part is £80k. If I go for a 75% LTV my deposit would be £20k.
Now if the seller agrees to £210, 40% would be £82k therefore the extra I would need is £2k

Yorkie1

I see your point. I don't understand enough about SO mortgages to comment further!

pioneer22

Don't do it find a shared equity instead.