Small question on Mortgage offer

Pud1985

Hi All,



We've just exchanged contracts and are due to complete and get keys for our first home on the 31st!



In the Mortgage application it states the following and i've been trying to figure out what it means for a while. We bought the house for £210,000 but we think we've done well to get it at that price and the EA (I know, I know) claim we do have a bargain.



It states: "Minimum value of the property required to borrow the illustrated amount £234,706"


Does this mean, they value the house at this? As in, we do have a bargain?



Thank you for any responses

davidmcn

When you say "the mortgage application" are you looking at the mortgage offer? Or something else? That looks like something quoted from an acceptance in principle or the like. I take it you haven't seen the bank's valuation report?

Pud1985

Double Post (sorry)

Pud1985

davidmcn wrote: »

When you say "the mortgage application" are you looking at the mortgage offer? Or something else? That looks like something quoted from an acceptance in principle or the like. I take it you haven't seen the bank's valuation report?

Sorry this is on the actual mortgage offer.


No, not seen that. We got a home survey done, the expensive one for strucural purposes etc. I thought we couldn't find out what they valued it at? There was no mention of this on any paperwork, only what's written above.

kingstreet

It's talking about the loan to value band for the product.

The minimum value means if the property was valued at less than that figure, you'd have to choose a product in a higher LTV band.

Divide the mortgage amount by the min val figure. What do you get?

Pud1985

kingstreet wrote: »

It's talking about the loan to value band for the product.

The minimum value means if the property was valued at less than that figure, you'd have to choose a product in a higher LTV band.

Divide the mortgage amount by the min val figure. What do you get?

By mortgage amount, do you mean the total we will pay or the total we are borrowing? (sorry)

eddddy

Pud1985 wrote: »

It states: "Minimum value of the property required to borrow the illustrated amount £234,706"

That doesn't sound like it's part of the formal mortgage offer on the property that you're buying.

As it says, it's an illustration - or "hypothetical example":

If you buy a property costing at least £234,076, we could lend you up to £x.

... but it now turns out that the reality is

You are buying a property costing £210,000, so they will lend you £y.

(Where £y is less than £x)

Your actual mortgage offer docs should say somewhere what the mortgage lender has valued the property at - but it's very unlikely that they valued it at above £210,000

kingstreet

Pud1985 wrote: »

By mortgage amount, do you mean the total we will pay or the total we are borrowing? (sorry)

What you are borrowing.

kingstreet

eddddy wrote: »

That doesn't sound like it's part of the formal mortgage offer on the property that you're buying.

As it says, it's an illustration - or "hypothetical example":

If you buy a property costing at least £234,076, we could lend you up to £x.

... but it now turns out that the reality is

You are buying a property costing £210,000, so they will lend you £y.

(Where £y is less than £x)

Your actual mortgage offer docs should say somewhere what the mortgage lender has valued the property at - but it's very unlikely that they valued it at above £210,000

It appears on the new style ESIS in both illustration and offer formats.

For example, it features on both for a Halifax case I have open in front of me. Illustration page 2 and offer page 6.

Pud1985

kingstreet wrote: »

What you are borrowing.

Ah, £199,500.



I've been a bit stupid. I've found at bottom of the survey the valuation report. It does state £210,000 which is amount we've borrowed.