Below Market Value?

Kazorina

We are first time buyers and we've only just started looking at houses. Getting a feel for areas and what we can get within our budget etc We have some money saved, enough to cover fee's etc but a full deposit is years away.

We are looking at small rural areas in Scotland and I have come across a few houses that are selling for £10,000 -£15,000 under value. How does this work with a mortgage and deposit?

The only thing I could find online was - a bank will lend up to 90% of the value but no more than 105% of purchase price? Is this up to date and valid? I am sure I asked the bank before and they advised me 90% of valuation or purchase price which ever is lower.

Basically I want to know if you buy below market value, is a deposit required?

kingstreet

It's based on market value or purchase price, whichever is the lower. The only way you get to use a price reduction on a second hand home, as part of your deposit is if you are buying from a family member.

cubegame

Isn't the concept of an asking price and offer different in Scotland? I thought there was some sort of sealed bid system?

kingstreet

It can work like that, but you still can't borrow more because the HomeReport value is higher than the agreed price.