Ltv

matt264

Quick question about LTV.

If we agree a sale price of say £179,995 for a property, but then the mortgage valuation comes back saying the house is worth £200,000. Would this increase our LTV ratio?

Just asking as we have seen a property on sale for the above amount, however I am certain from previous house sales that the house is possibly worth more, we just know the sellers are after a quick sale so it has been reduced.

I'm presuming it isn't this easy, but just thought I would ask as google comes up with nothing apart from if the house is valued at less.

ACG

No, its the lower of the purchase price or valuation.

matt264

Thanks for the reply.

I thought it wouldnt lower our loan to value rate but thought I may aswell ask.

Annisele

Lenders do very occasionally take the valuation, but only really for family transactions.

So "this property is really worth £200k but my mum/grandfather is selling it to me for £100k and gifting me the rest of the equity" might work. Vendor has lowered the price for a quick sale won't - because the lender will be worried about what happens if it has to make a quick sale (i.e. if it has to take possession).