LTV - Is it really "Value" or "Price"

foxy-stoat

davidmcn said:

lacalladine said:

Everwhere I have looked online the LTV is calculated on the mortgage required / appraised property value.

I think you've been looking in the wrong places. It's pretty universal that the "V" in LTV is the lower of the appraised value and the purchase price (on the basis that the agreed price is more likely to be accurate than the surveyor's estimate - after all, if the vendor hasn't managed to get a higher price, why would the lender if they repossessed?).

This is true in most circumstances, but in this case there is a court order from a divorce settlement that the purchase price is lower than the actual value.

davidmcn

foxy-stoat said:

davidmcn said:

lacalladine said:

Everwhere I have looked online the LTV is calculated on the mortgage required / appraised property value.

I think you've been looking in the wrong places. It's pretty universal that the "V" in LTV is the lower of the appraised value and the purchase price (on the basis that the agreed price is more likely to be accurate than the surveyor's estimate - after all, if the vendor hasn't managed to get a higher price, why would the lender if they repossessed?).

This is true in most circumstances, but in this case there is a court order from a divorce settlement that the purchase price is lower than the actual value.

No, that was the OP's situation. I was replying to lacalladine who had resurrected the thread.

lacalladine

davidmcn said:

foxy-stoat said:

davidmcn said:

lacalladine said:

Everwhere I have looked online the LTV is calculated on the mortgage required / appraised property value.

I think you've been looking in the wrong places. It's pretty universal that the "V" in LTV is the lower of the appraised value and the purchase price (on the basis that the agreed price is more likely to be accurate than the surveyor's estimate - after all, if the vendor hasn't managed to get a higher price, why would the lender if they repossessed?).

This is true in most circumstances, but in this case there is a court order from a divorce settlement that the purchase price is lower than the actual value.

No, that was the OP's situation. I was replying to lacalladine who had resurrected the thread.

So is my IFA feeding me a pile of sh*te?

davidmcn

lacalladine said:

davidmcn said:

foxy-stoat said:

davidmcn said:

lacalladine said:

Everwhere I have looked online the LTV is calculated on the mortgage required / appraised property value.

I think you've been looking in the wrong places. It's pretty universal that the "V" in LTV is the lower of the appraised value and the purchase price (on the basis that the agreed price is more likely to be accurate than the surveyor's estimate - after all, if the vendor hasn't managed to get a higher price, why would the lender if they repossessed?).

This is true in most circumstances, but in this case there is a court order from a divorce settlement that the purchase price is lower than the actual value.

No, that was the OP's situation. I was replying to lacalladine who had resurrected the thread.

So is my IFA feeding me a pile of sh*te?

No, if they're saying the price needs to be used where it's lower than the valuation, they're correct.

lacalladine

davidmcn said:

lacalladine said:

davidmcn said:

foxy-stoat said:

davidmcn said:

lacalladine said:

Everwhere I have looked online the LTV is calculated on the mortgage required / appraised property value.

I think you've been looking in the wrong places. It's pretty universal that the "V" in LTV is the lower of the appraised value and the purchase price (on the basis that the agreed price is more likely to be accurate than the surveyor's estimate - after all, if the vendor hasn't managed to get a higher price, why would the lender if they repossessed?).

This is true in most circumstances, but in this case there is a court order from a divorce settlement that the purchase price is lower than the actual value.

No, that was the OP's situation. I was replying to lacalladine who had resurrected the thread.

So is my IFA feeding me a pile of sh*te?

No, if they're saying the price needs to be used where it's lower than the valuation, they're correct.

Surely if I'm buying a house on a mortgage of £178k and it is valued at £202k, then even at time of purchase there is a 12% equity even before I make my first mortgage repayment. Is this in need of review? 

foxy-stoat

lacalladine said:

Surely if I'm buying a house on a mortgage of £178k and it is valued at £202k, then even at time of purchase there is a 12% equity even before I make my first mortgage repayment. Is this in need of review? 

Probably but them are the rules - its their rules afterall.

davidmcn

lacalladine said:

davidmcn said:

lacalladine said:

davidmcn said:

foxy-stoat said:

davidmcn said:

lacalladine said:

Everwhere I have looked online the LTV is calculated on the mortgage required / appraised property value.

I think you've been looking in the wrong places. It's pretty universal that the "V" in LTV is the lower of the appraised value and the purchase price (on the basis that the agreed price is more likely to be accurate than the surveyor's estimate - after all, if the vendor hasn't managed to get a higher price, why would the lender if they repossessed?).

This is true in most circumstances, but in this case there is a court order from a divorce settlement that the purchase price is lower than the actual value.

No, that was the OP's situation. I was replying to lacalladine who had resurrected the thread.

So is my IFA feeding me a pile of sh*te?

No, if they're saying the price needs to be used where it's lower than the valuation, they're correct.

Surely if I'm buying a house on a mortgage of £178k and it is valued at £202k, then even at time of purchase there is a 12% equity even before I make my first mortgage repayment. Is this in need of review? 

If it's really worth £202k then why is nobody offering £202k for it?

The best way of finding the open market value of something is to put it on the open market and see what you can get. They've done that, the answer is £188k.

lacalladine

There were offers higher, but lots vanished due to COVID19 

davidmcn

lacalladine said:

There were offers higher, but lots vanished due to COVID19 

Well, there we go. The only offers which count are the ones which can actually proceed to completion.

lacalladine

But, the market appraisal valuation is still £202k, even if the only offer is £188k, doesn't mean the value is £188k