Mortgage offer reduced because of incentive

PeacefulWaters

tinkerbell1985 wrote: »

I fought tooth and nail for the stamp duty, the developer had a buyer previously secured who fell out of bed at the last minute due to his personal circumstances. Because of this and the fact the developer wants to get off the site now, we managed to secure the stamp duty paid, but this was not easy.

Anyhow, it's been valued by the lender's surveyor (taking into account the stamp duty) at the purchase price - he hasn't down valued it, which he could have done, thus confirming the purchase price is the correct open market value. The surveyor has to use comparable evidence to support his valuation.

Remove all the emotion from it. Step back a pace.

Mortgage lenders tend to lend based on the lower of purchase price or valuation.

In this case the builder has slipped you a bung of sorts. It's legal. But it's no different to knocking the same amount off the purchase price.

So why would it make any sense to base lending on the purchase price when you're really paying less than the purchase price?