First Time Buyer - Offer Above Home Report Value on a Repossessed Property

AnneBoleyn

Hi everyone


I have been lurking around the forms for the past few weeks reading all the great advice. Hopefully someone will also be able to answer my queries.


I am a first time buyer and I am very excited about buying my first home. I have mortgage broker, know what I can afford and now I'm house hunting. My mortgage broker has advised getting a decision in principal as the best mortgage deals change on a regular basis but they have given me a "mortgage in principal certificate" having carried out affordability checks.


I put an offer in on a house a few weeks ago which wasn't successful. I didn't think I would find a house that I liked as much but it turns out my friends and family were right and I have found another house that I love.


The house is a repossession and needs a bit of work but it is mainly cosmetic. It is very reasonably priced. It was put on the market a few days ago and it had an open day today. The estate agent has said she is going to set a closing date next week.


The type of properties I am looking at seem to be very popular in my area and are selling quickly at above the value in the home report. The exact same style of house in the same estate but in better condition sold for £7,000 above the home report value a few weeks go. The home report value was £25,000 more than the house I am looking at.


I am happy to offer above the home report as I am excited about making it my home and I think with a bit of TLC the value would increase.


My question is about the mortgage. Is a mortgage is based on the value in the home report or based on the offer. For example if I was to bid £5,000 above the value on the home report would the LTV of the mortgage be based on the value on the home report and therefore I would need to pay the extra £5,000 above the home report value in addition to my deposit.


I am also wondering if there is any problems with getting a mortgage on a repossessed house. I am in Scotland if that makes any difference.


Thanks

dimbo61

The mortgage offer will be based on the Valuation that the RICS surveyor values the property at.
Not what you, the vendor or estate agent thinks it is worth.
If you are able and willing to pay more you need to have that cash spare !

davidmcn

AnneBoleyn wrote: »

Is a mortgage is based on the value in the home report or based on the offer

It's based on the lower of those figures.

I am also wondering if there is any problems with getting a mortgage on a repossessed house.

Not in itself. They're usually fine, but obviously the owners are unlikely to have spent any money on routine maintenance etc recently. Check whether the surveyor has highlighted something about the condition of the property which makes it unmortgageable (or requires specialist reports). You won't get any of the usual warranties that e.g. the central heating is in working order, and probably not an opportunity to test things, so budget for unexpected repairs.

Caz3121

remember the "offers over" prices are often lower than they expect to achieve, get lots of interest, take it to sealed bids with lots of bidders all wanting to ensure they are the successful bidder.
Anything you offer over the valuation figure needs to come from you

AnneBoleyn

Thanks everyone. That's what I was suspecting but I wanted to check.


I have the extra saved. Now I just need to do the difficult part and decide what to offer. If only I had a crystal ball to help me.