Mortgage Valuation Down Valued, Funding Optiona
The situation that I’ve got is as follows...
We have agreed a purchase price for a property at £510,000. Our mortgage amount is £295,000 with a deposit of £215,000 (57.85 LTV).
We received the valuation back yesterday (done via a desktop valuation model) and it’s came back as £420,000, this is £90,000 less than the £510,000 purchase price that we’ve agreed. I’m not sure how or why it’s so far apart (based on the properties in the area it really does seem like a crazy low valuation).
The ‘to do’ list that I’ve received states that because the valuation is £420,000 the maximum lending on our current chosen product (60% LTV) is £252,000 and asks me to advise how we want to proceed.
Having discussed the situation with friends, I’d like to understand if the below sounds possible and is a common scenario.
What I’d like to be able to do is still borrow £295,000 with a £125,000 deposit against the £420,000 valuation that has come back on a 1.70%, 75% LTV product.
I believe that would mean my LTV on this would be circa 70.24%.
We would then fund the £90,000 difference of the purchase price through savings / equity on the sale of my property.
Is it possible, common etc to only request a mortgage amount for part of the purchase price, and then make up the different to the full purchase in in cash?