House purchase potential down valuation

BarleyGB

Hi, I am looking for some advice on the Mortgage process with a potential down valuation.

Im aware that the mortgage valuation is the 'true price' and what you should pay in current market, however, I am looking to buy an apartment in a specific block and they sell very quickly and am competing with investors paying cash. For personal reasons I consider it worth paying over current market price, and accept the risk that property price increases may not continue.


An apartment has just come to market at £350,000, if it does not value up at asking price, or sealed bits lead to an above asking price bid, is there an option to negotiate with the lender?

E.g. If my mortgage application for a 75% LTV loan (£262,500), is withdrawn on the basis the property valued at £340,000 (10,000 under), would the lender still proceed if I agreed to change the deposit from £87,500 to £95,000? Effectively maintaining the 75% LTV (£85,000 deposit and £10,000 covering the devaluation)?

Im asking as I understand lenders practice is to withdraw the offer, but want to know if its usual practice to accept that the purchaser puts makes up the valuation shortfall by increasing the deposit?

My reasoning for this approach is im seeing apartments come to market every few months and each time they're £5000, £10000 higher. In what I perceive to be a market supporting continued growth in house prices im prepared to take the risk.

I would just appreciate advice on lenders practice, not the rights and wrongs of house prices, the risks or my decision.

Thank you.

Thrugelmir

The lender will as you've calculated base their offer on their valuation.
There's no negotiation.

If you wish to fund the shortfall between the valuation conducted on behalf of the lender and the purchase price agreed you can.

From a lenders perspective their risk exposure is unchanged.