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Difference between valuation and final negotiated price...a "loan"?
highguyuk
Posts: 2,763 Forumite
Price agreed for a house of £110,000. Valuation has come back for £110,000. All good.
But, there is substantial (in our opinion) work to be done to the house that has been identified after the survey. We knew it needed Electrical work and potential heating, survey has suggested damp work and new roof.
If we were to then offer £100k lets say for a property valued at £110k for mortgage purposes, what happens to the other £10k agreed upon? Can I effectively take that 10k as a "loan", to do work on the house with?
A colleague at work told me this was possible, but it doesn't seem right?
But, there is substantial (in our opinion) work to be done to the house that has been identified after the survey. We knew it needed Electrical work and potential heating, survey has suggested damp work and new roof.
If we were to then offer £100k lets say for a property valued at £110k for mortgage purposes, what happens to the other £10k agreed upon? Can I effectively take that 10k as a "loan", to do work on the house with?
A colleague at work told me this was possible, but it doesn't seem right?
0
Comments
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No, the value of the house would be £100,000 if that's what you pay. There would be no other 10k, your LTV would be based on £100,0000
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No, the value of the house would be £100,000 if that's what you pay. There would be no other 10k, your LTV would be based on £100,000
I thought it didn't sound right.
But surely, the value has been agreed upon with the surveyors at 110k? If I were to now pay 50k, the value of the house would still be 110k?0 -
I thought it didn't sound right.
But surely, the value has been agreed upon with the surveyors at 110k? If I were to now pay 50k, the value of the house would still be 110k?
The lender will base lending on the LOWER of the purchase price or valuation.
Exceptions are inter family and Right to Buy.I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0
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