Mortgage valuation and bidding high

a1234555

Hello, we found our dream home and knowing what the market is lke currently we bid pretty high for the best and final offer. Our concern is that if we get our offer accepted there might be issues as the mortgage valuation stage if it is valued much lower. However! We have a sizeable deposit (over 25%). Would our large deposit help us at all if the lender values the house at a lower price? If for whatever reason we cannot afford the mortgage, surely they should have the re-assurance that they can take a bite into our deposit and therefore be okay with our high bid?

K_S

@a1234555 If you're asking whether it being a 75% LTV mortgage will encourage the lender to value it at a higher amount than they otherwise would, that is not the case.

I've had clients with down-valuations even at 60% LTV. The lender gives you the benefit of lower rates assuming a lower LTV but that LTV is only valid if backed by a valuation at the agreed purchase price.

davidmcn

If you want to pay more than the valuation, you'll still need to make up the balance yourself - the lender will be basing their calculations on the valuation. Not clear whether you're able to do that.

[Deleted User]

a1234555 said:

If for whatever reason we cannot afford the mortgage, surely they should have the re-assurance that they can take a bite into our deposit and therefore be okay with our high bid?

They can't 'take a bite into your deposit'.  That goes to the seller when you buy the property. 

It's not like a rental deposit.