No Deposit - Asking Price Lower Than Home Report Value

glasgowmoneyman

Hi guys,

My girlfriend and I have been working hard over the last year or so to pay off our debts - we're almost there! We're now looking to get on the property ladder, and although we don't have much of a deposit saved up, we have seen several properties on the market with an asking price much lower than the home report value.

Does anyone know if we could get a mortgage, given that the loan to value ratio is around 80% - even though we don't actually have capital for a deposit?

I should also add that our credit files are immaculate - no missed payments, late payments or defaults etc, and we both have good jobs earning over £28k

Your advice is much appreciated,

Thanks

Wh05apk

Lenders will lend based on the LOWER of purchase price or valuation.

What are you referring to as "home report value"?

Why are properties being sold below market value? surely if the market value was higher they would sell at that price? otherwise the sale price would be market value?

glasgowmoneyman

Wh05apk wrote: »

What are you referring to as "home report value"?

It looks like it's a Scottish thing:

http://www.scotland.gov.uk/Topics/Built-Environment/Housing/BuyingSelling/Home-Report

Basically I was under the impression that mortgage applications were decided based on Loan to Value rather than loan to purchase price. Therefore if I were able to purchase a house valued at, say £100,000 for £80,000 then I wouldn't need a deposit?

Or have I got this completely wrong?

harvey115

LTV although sounds to be connected with the Value, but this is the lowest of the either value paid or valued by the surveyor.

If you pay £80K for £100K, the LTV will consider £80K as the value and if you pay £100K for a house valued at £80K, the LTV will also consider £80K. So it always considers the lowest of either value.