Mortgage question - FTB

Chris6ixty6

Hi,

My partner and I are looking to buy a house. First time buyers. We have an AIP for £360,000 plus £40k deposit, giving a maximum house price of £400k.

We're looking at offering £385k on a property.

Can we still borrow £360k or will that be reduced as the house price is less than £400k (while keeping with a 10% deposit)?

The extra would be for necessary improvements.

Thanks in advance,

Chris

xyz123

What is the LTV and income on the AIP.

Also note AIP is not a guarantee for mortgage.

ACG

If you are buying for £385k you would need to put down £38,500 to have a 10% deposit. The LTV is based on the purchase price and equity/deposit.

Chris6ixty6

Thanks both. What I understand is that the £38,500 would be the 10% deposit, and a 90% loan would then be £346.500 - that's for the £385,000 house.

The AIP is based on a £400,000 house, including a £40k deposit and 90% LTV.

What I would like to do is put down the same £38,500 deposit (or go up to £40k) while still borrowing £360,000. I.e. the same terms offered in the AIP based on a £400,000 house but for a £385,000 property.

Borrowing this extra money would allow us to make the improvements we need to, and in theory they've confirmed they would lend up to that amount (realising AIP is not a guarantee).

Is that a little clearer? Thanks again.

ACG

You cant do that, however you could put down a smaller deposit (as little as 5% with some lenders) and then pay to do the works with the money you have held back.

But all figures will be based on the lower of the valuation or purchase price - in this case it would be £385k unless the valuation comes back lower.

Chris6ixty6

Thanks ACG. That's a shame but that's the information we were after.