Deposit & LTV

ftb848717

Hi, new to this so apologies if it’s a silly question. 

If a property was valued (& for sale at) say 200k and I managed to have an offer accepted at £190K, would I still be required to put down my full £20k deposit (therefore having £170k mortgage) or would I only need £10k to count towards a 10% deposit requirement. 

The difference in monthly costs between £170k & £180k mortgage is negligible, & i obviously feel I could better spend that £10k elsewhere, but unsure if this is how it works?

Windofchange

Your can put down whatever you want as long as it meets the bank's lending criteria. Also, 10% of 190k is 19k not 10k, so it looks as if the answer to your question is you need to put down pretty much the whole 20k anyway? 

K_S

ftb848717 said:

Hi, new to this so apologies if it’s a silly question. 

If a property was valued (& for sale at) say 200k and I managed to have an offer accepted at £190K, would I still be required to put down my full £20k deposit (therefore having £170k mortgage) or would I only need £10k to count towards a 10% deposit requirement. 

The difference in monthly costs between £170k & £180k mortgage is negligible, & i obviously feel I could better spend that £10k elsewhere, but unsure if this is how it works?

@ftb848717 In a normal transaction, as far as the lender is concerned, the "value" of the property for the mortgage can be no higher than the agreed purchase price, so in the example you've cited, the lender valuation will be 190k and a 10% deposit would mean 19k and your mortgage size would be 171k.

If your circumstances qualify for a 95% LTV mortgage (and the numbers add up), you will require a 9.5k deposit and the mortgage size will be 180.5k.