What if property is down valued but LTV isn't maxed

_Amaryllis_

Hi, I'm going to be looking to buy my first property in about a year or two and I wanted to ask what may be a rather stupid question but I have no experience of how this works. I'm going to use an hypothetical example to illustrate what I mean because I'm not sure I know the correct terms.


The example is thus:
I put in an offer for 160K on a property and have an agreement in principle to borrow 95K (LTV of 60% roughly) on a mortgage product with a maximum LTV ratio of 80%.
The lender then does the valuation and values the property at 146K that means that the 95K is now a LTV ratio of approximately 65%. Since this is still below the maximum LTV ratio of the mortgage product I have the AIP for would they still be willing to lend me that amount? Or would they reduce it to 87.6K (60% of 146)


I do intend to go to a broker when I am actually in a position to buy but if the lower valuation would result in the lender reducing the amount they would lend me even though it is below the maximum LTV then I need to save up a buffer fund for this eventuality before I can say I'm in a position to buy, therefore I would like to know the answer to this question.


Thanks in advance.

Typhoon2000

That will offer you £95k or 80% of the valuation, which ever is lower.

amnblog

Typhoon2000 wrote: »

That will offer you £95k or 80% of the valuation, which ever is lower.

Not necessarily as the increased loan to value can affect the credit scoring and therefore the lending.