House Value from Mortgage Valuation

Stuffedhead

Hi all
I am in the process of just about to fully complete on a property in Scotland. The house is worth 190k. We have agreed in a sale of 175k due the property being in Probate.

My mortgage provider has sent over the mortgage documents. There valuation states that the house is worth 175. Is this an issue going forward ?

We have a 95% ltv which I was hopping after two years with the drop in sale price and our deposit we will be at an 85% ltv.

Stuffedhead

Just. Make sure that when we remortgage in two years that the valuation that Santander have given won't come back to bite me.

[Deleted User]

They will use the initial valuation and then apply assumptions to it to try keep track of a more up to date valuation.

If the initial valuation is low then all the increases and decreases will be applied to the wrong figure. Similar to how zoopla etc works.

You may need to request a new valuation if they havent tracked it close enough. Or move to a new lender who will do a new valuation anyway

Stuffedhead

Perfect thanks

Gstrang81

What does the home report say for the value? When we purchased our house, the home report value was the one used by the lender to calculate the LTV against the mortgage they were providing

davidmcn

Gstrang81 wrote: »

What does the home report say for the value? When we purchased our house, the home report value was the one used by the lender to calculate the LTV against the mortgage they were providing

But did you pay less than the HR value? Lenders will normally use the lower of the valuation and the actual price paid (assuming it's an open market sale), on the basis that the price achieved is a better indication of the true value than the surveyor's estimate.

gj373

Stuffedhead wrote: »

Hi all
The house is worth 190k. We have agreed in a sale of 175k due the property being in Probate.

A house is only truly worth what someone will pay. So in this instance it is worth 175k not 190k.

Gstrang81

davidmcn wrote: »

But did you pay less than the HR value? Lenders will normally use the lower of the valuation and the actual price paid (assuming it's an open market sale), on the basis that the price achieved is a better indication of the true value than the surveyor's estimate.

£2k under home report but the value of the property stated on our mortgage offer is the full home report valuation

Gstrang81

Gstrang81 wrote: »

£2k under home report but the value of the property stated on our mortgage offer is the full home report valuation

Nope, you were right Davidmcn! Double checked my offer and it's the price we paid stated as the property value. Who knew