Could someone explain how a house purchase allowance works please?

K_S

Asiam786 said:

Thanks so much @K_S. 

Can you pls explain the LVT? I'm totally thick when it comes to jargon. Is what youre saying that because we're getting a reduction in price, we are borrowing less? So worst case...? Sorry!

@Asiam786

The original loan to value is calculated as: 380k / 507k = 74.95% LTV

The new loan to value is calculated as: 380k / 503k = 75.55% LTV

There's no need to panic yet as one of the following could happen -

1. Barclays could decide that it's still inside their tolerance and leave the product unchanged in which case this will have no impact on your plans. I've had this happen with a down-val with a mainstream lender and seen the same on the forum with another lender (Kent if I'm not wrong) so it's a possibility.

2. Barclays could say that a new product (80 or 85% LTV depending on the standard bands they use) needs to be chosen but allow it to be done from the expired product-guide that existed when you put in the application 5 months ago. So while you may have to pay a slightly higher rate, it's unlikely to be a lot higher than what you're on now. Again, I've had this with other mainstream lenders.

3. Barclays could say that a new product (80 or 85% LTV) needs to be chosen from the current guide. This will mean a big jump in interest rates and to avoid it, you could bring down the loan size to £377,250 (75% of 503k) by increasing your deposit.

The problem with Barclays is that their back-end systems can be horribly hard to navigate, especially for post-offer matters like these so your solicitor needs to know what they're doing and be persistent. If you have a broker, I would recommend letting them know as well so they can speak to their BDM if needed.

Good luck, I hope you get to completion soon!

Asiam786

@K_S Hi! Theyve just okayed it all! No issues. Just hope all goes smooth now, as both sides are keen to exchange/complete.

K_S

Asiam786 said:

@K_S Hi! Theyve just okayed it all! No issues. Just hope all goes smooth now, as both sides are keen to exchange/complete.

@asiam786 That's great news, glad to hear that!