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Loan to Purchase Price not LTV?
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johndav7
Posts: 1 Newbie
Hi All,
Two months ago, I secured a Decision in Principle with Nationwide Building Society.
In the meantime, I have had an offer accepted on a property which is below the Home Report valuation. Nothing too strange - the sellers are moving abroad and wanted a sale after having the property on the market for 6 months. The refreshed Home Report valuation is still above my offer.
It was only then that I was told by Nationwide that my mortgage LTV would be calculated against my Purchase Price and not the Home Report value. The amount I want to borrow is 80% against the purchase price but 75% against the valuation. The difference in interest during the 2 year term means that the 80% against the purchase price will cost me £1700 more compared to the 75% against the valuation.
Is this now common practise across most mortgage lenders to calculate a LTV against the Purchase Price if you have been fortunate and clever enough the negotiate below the Home Report valuation? I am considering the option of looking elsewhere.
Thank you in advance for any insight.
Two months ago, I secured a Decision in Principle with Nationwide Building Society.
In the meantime, I have had an offer accepted on a property which is below the Home Report valuation. Nothing too strange - the sellers are moving abroad and wanted a sale after having the property on the market for 6 months. The refreshed Home Report valuation is still above my offer.
It was only then that I was told by Nationwide that my mortgage LTV would be calculated against my Purchase Price and not the Home Report value. The amount I want to borrow is 80% against the purchase price but 75% against the valuation. The difference in interest during the 2 year term means that the 80% against the purchase price will cost me £1700 more compared to the 75% against the valuation.
Is this now common practise across most mortgage lenders to calculate a LTV against the Purchase Price if you have been fortunate and clever enough the negotiate below the Home Report valuation? I am considering the option of looking elsewhere.
Thank you in advance for any insight.
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Comments
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I thought it was normal for the LTV to be based on whichever is lower out of valuation or purchase price.0
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Standard practice.0
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Don't waste your energy looking into this any further
Every lender will treat this in exactly the same mannerI 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 -
In the meantime, I have had an offer accepted on a property which is below the Home Report valuation. Nothing too strange - the sellers are moving abroad and wanted a sale after having the property on the market for 6 months. The refreshed Home Report valuation is still above my offer.
Then your offer is the market value. Any other number is just pure speculation.0 -
Yeah the Home Report valuation (or any other valuation) is just an educated guess at the value.
The true value of the house is what someone is willing to pay for it: by buying it, you're defining the value."You did not pull yourself up by your bootstraps. You were lucky enough to come of age at a time when housing was cheap, welfare was generous, and inflation was high enough to wipe out any debts you acquired. I’m pleased for you, but please stop being so unbearably smug about it."0 -
I thought it was normal for the LTV to be based on whichever is lower out of valuation or purchase price.
'twas always thusI 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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