Undervalued Property

Gidged500

My partner and I are in the process of buying our first house (not a new build) it’s a 2003 house.
The asking price was offers over £250k , we offered £250 k and our offer has been accepted.
The bank has carried out a mortgage valuation report and valued the house at £214k.
My partner and I are looking at having a home buyers report carried out but have been advised the seller may have one carried out.
We really like the house but we are worried we won’t be accepted for the mortgage due to the under valuation , and may loose a lot of money on the house if we come to sell.
Can anyone help please

pinkshoes

Do you have a large deposit or the cash to make up the short fall?

Gidged500

We have 30k deposit so there’s 6k the lenders could be loosing

eddddy

Gidged500 wrote: »

The asking price was offers over £250k , we offered £250 k and our offer has been accepted.
The bank has carried out a mortgage valuation report and valued the house at £214k.

What LTV is the mortgage product that you want?

• If, for example, it's 90% - the bank will lend you a maximum of 90% of £214k.

• So the most they would lend you is £192.6k.

• So if your offer stays at £250k - you'll need a deposit of £57.4k
  
  (Plus enough savings to cover all the other costs of buying)

Gidged500

The LTV is 88%
250k house 30k deposit

eddddy

Gidged500 wrote: »

The LTV is 88%
250k house 30k deposit

You've misunderstood (or maybe I've explained badly).

The mortgage product you've applied for will have a maximum LTV. (It's probably 90%)

If the maximum LTV is 90% - the bank will only lend you 90% of their valuation.


To be clear - they won't lend you 90% of £250k, they will only lend you 90% of £214k.

So they won't lend you £220k, they will only lend you £192.6K

Gidged500

Ah sorry yes I did misunderstand.

We havnt got 57.4k only 30k

What’s our best next step ? Get a homebuyers report and see what that valuation comes back at. Then if it’s less try and negotiate with the seller ?

Thrugelmir

Why has the lender valuation come in at a much lower figure? Little point in wasting money on a homebuyers survey. Might even be the same company that undertakes the job.

Gidged500

I have no idea , unless they havnt taken into consideration the sellers are leaving items in the house
Eg : fridge , freezer , cooker , dishwasher , dryer , washing machine

eddddy

Gidged500 wrote: »

Ah sorry yes I did misunderstand.

We havnt got 57.4k only 30k

What’s our best next step ? Get a homebuyers report and see what that valuation comes back at. Then if it’s less try and negotiate with the seller ?

Whatever the homebuyers report says, your mortgage lender will only lend you a max of £192.6k on that house.

So it looks like the max you can afford to pay is £192.6k + £30k = £222.6k

So I guess your main options are:

• Try to negotiate the seller down to somewhere between £214k and £222.6k (TBH - that seems unlikely)

• Ask your mortgage lender to reconsider their valuation (TBH, people do that, but I've never known anyone to be successful)

• Apply to another mortgage lender, to see if they'll value the property higher (very risky)

• Walk away and find another property

TBH, the outlook isn't good.

Gidged500

I may try and negotiate with the seller as they have moved already to their new house and want to sell desperately.

It is a long shot , will be devastated if we have to walk away.
We get our own valuation on the house carried out incase this company have vastly undervalued the house at ?