Telling estate agents our LTV?

chasingfreedom

We had a similar experience so far and every estate agent has asked us for proof of our deposit, AIP and various other things. I was surprised we didn't need to include shoe sizes!! I'm sure even if you don't tell them they can work out your LTV from your available funds but they are pretty certain to ask you in the current climate. Very different to buying houses even a few years back, that's for sure.

Octothorpe

If people are going to bid up a price on a house they should be doing so with eyes wide open, aware of it's value and liklihood of passing valuation, when considering their deposit amount. And be prepared to make up the shortfall if it's undervalued. Within reason.

Remember a valuation is purely for the bank, to assess them getting their loan back quickly in event of you defaulting on the mortgage. 
That's not negative equity btw, which is when you sell for less than what you owe on the mortgage. 

The house we are buying,  the first set of buyers couldn't secure a mortgage for what they bid! We can and didn't get a down valuation,  in part i think,  due to our good deposit. 

steampowered

blueorchid94 said:

First of all, it's crazy to me that anyone would pay to make up the difference if there was a downvaluation, because you're immediately in negative equity, but the fact that this is a reason for them to advise their clients to avoid 95% mortgages seems like rubbish to me. If your house is downvalued, no matter what the LTV of your buyer is, they will probably try to renegotiate or pull out of the purchase, right?

The valuer works for your bank. It is perfectly normal for them to give the bank a lower valuation for lending purposes than you have agreed to pay the vendor.

Valuation is not an exact science. Sometimes you can get conservative valuations. It doesn't mean you get to renegotiate the price. 

The EA is correctly advising that you are higher risk, since (1) you have a bigger chance of running into problems and (2) you cannot proceed if there is even a smaller valuation.