Mortgage valuation higher than sale price

gazter

Just wondering what happens in this circumstance.

As I understand it, mortgage rates are heavily based around LTV.

I am in the process of a mortgage which puts us on a 63% ltv. So, if the sale price was £100,000 we are putting down £37,000, and the rest mortgage.

What happens if the mortgage lenders valuation came back with a value io £105,000?

Would they share that figure, and would it impact on the LTV? Ie, would it, in the case outlined, be enough to push the LTV into the 60% bracket?

The suspicious side of me thinks that values know where their bread is buttered, and having already knowing what the sale price is will not value properties over that when their client is a lender.

Annisele

The LTV will be based on the lower of the price you've agreed to pay and the surveyor's valuation.

(The only exception might be if you were buying from a family member. If you've bought your mother's £200k house for £50k, the lender might believe the house genuinely is worth £200k. If you paid that same price on the open market, the lender wouldn't believe the seller would have agreed to sell for £50k if the real value was £200k).

kingstreet

As Annisele said, lenders take the lower of purchase price, or valuation.