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First time buyer mortgage advice
bigredphil
Posts: 2 Newbie
I got an agreement in principle for £5k more than I'm going to pay for the house.
I would like to use that £5k to do some work to the house but I'm not really sure where I stand. Is possible for me to continue with my mortgage application based on the higher value and spend the extra £5k as I wish?
Or do I just tell my lender and see what they say? I'm assuming they want to reduce their risk and lower the amount they lend by £5k.
I would like to use that £5k to do some work to the house but I'm not really sure where I stand. Is possible for me to continue with my mortgage application based on the higher value and spend the extra £5k as I wish?
Or do I just tell my lender and see what they say? I'm assuming they want to reduce their risk and lower the amount they lend by £5k.
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Comments
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It does not work like that.
You can only borrow up to a percentage of the property value. This will be a maximum of 95% depending on the product.I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, 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 -
Is the property value not dependant on the lender's valuation rather than what I pay for the house?0
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"whichever is the lowest".Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam0
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bigredphil wrote: »Is the property value not dependant on the lender's valuation rather than what I pay for the house?
Yes, but the lender will only lend up to a maximum of 95% of the value of the house, no matter what the MIP says.
The days of borrowing more than your property is worth are long gone.0 -
bigredphil wrote: »Is the property value not dependant on the lender's valuation rather than what I pay for the house?
The mortgage is based on the lower of the purchase price or the valuation on a normal case.
The valuer will extremely rarely volunteer a value over the offer price.I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, 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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