LTV query

Bibbs77

Hi there,

Just have a small query...perhaps obvious but just want to clarify.

Does the LTV take into account the actual value or the price you pay?

We're looking at a property with a value of 200k on the Home Report but think that we could buy it for about 177k adn have a 30k deposit leaving a total of 147 which we'd require a mortgage for. Am I right in thinking then that we need 147k loan on a 200k value (73.5%)

We already have a flat which we are contemplating keeping to rent out if we don't sell it soon. At the moment we have a LTV of 53% (it's worth 70k). Is it worth trying to release some equity from this for the new property or just trying to keep that as low as possible? We have a northern rock mortage and it's fixed (at 6.5%) until next September with a £1600 ERC.

Lots of options but just need to clarify the LTV situation as we'd like to keep the new property under 75% to get a better rate!

Thanks for any help anyone can offer.

GMS

LTV is calculated on the LOWER or the purchase price OR valuation unless buying from a close family member.

In your situation you would be 147k against 177k so 83% LTV assuming a none inter family sale.

Bibbs77

Ok thanks for that. We still have the option of releasing some equity from out flat then to try and keep it below 75%.