Lender undervalued property

2 Posts
Hello,
We’re currently in the process of buying our first home. Last week the house was surveyed by the lender and on the basis of the report they are not prepared to lend us the full amount required. The report states £10 000 worth of improvements are required to the house therefore they have knocked this of their valuation. Should this work be done to a satisfactory standard the new value would meet our original offer.
The lender has, therefore, knocked £10 000 off the amount they are prepared to lend us but also require a £10 000 retainer until the work is complete.
As I understand it this means:
1. We need to make up the shortfall in the mortgage based on the £10 000 difference
2. Pay a £10000 retainer
3. Find £10000 to complete the work in order to release our retainer
Does this seem right? It seems like we are being hit twice?
Thanks for your advice
We’re currently in the process of buying our first home. Last week the house was surveyed by the lender and on the basis of the report they are not prepared to lend us the full amount required. The report states £10 000 worth of improvements are required to the house therefore they have knocked this of their valuation. Should this work be done to a satisfactory standard the new value would meet our original offer.
The lender has, therefore, knocked £10 000 off the amount they are prepared to lend us but also require a £10 000 retainer until the work is complete.
As I understand it this means:
1. We need to make up the shortfall in the mortgage based on the £10 000 difference
2. Pay a £10000 retainer
3. Find £10000 to complete the work in order to release our retainer
Does this seem right? It seems like we are being hit twice?
Thanks for your advice
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Replies
Just saying.
That is the key issue here.
If you want this property you need to reconsider in light of this and re-offer £10,000 lower minimum.
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.