Son First Time Buyer. Mortgage Broker Suggests a 39 year mortgage? New Issue!

CSI_Yorkshire

No one person decides "what the flat is worth".

It's worth whatever price is agreed between buyer and seller.

The surveyor and lender only really care if they can get enough money back from a sale after repossession to pay off the mortgage.

If the seller isn't budging, the only question is "is the flat still worth £100k to your son?"  If so, no problem.  If not, find somewhere else.

ACG

3 options:
1) Go with what the broker suggested.
2) Try another lender and see if you get another surveyor. 
3) Pull out. 

MFWannabe

Iiyama said:

Edit - New Issue 

The new issue related to my sons mortgage is this:

The surveyor has valued the flat at £15,000 below estate agents valuation. The seller won’t budge. The mortgage advisor has suggested they give him a 95% mortgage and the £18,000 he was going to use as a deposit £15,000 goes to the seller!

This sounds like very bad advice to my inexperienced mind!  Surely common sense would say that is not something you would do as you are paying £15,000 over what the flat is worth? 

Or am I missing something?

Are there other properties available? If there are then I’d walk 
it’s not a good idea to pay that much over valuation imo, not on a 100k 
property, maybe if you were talking about a much more expensive property that you would be living in for many years 

No19v87

Probably an acceptable risk to carry if he plans to be there for a long time. If he’s going to look to flip it and move on in 3-5 years, probably not advisable to continue.

Iiyama

As ever, interesting guidance. I would think as first time buyer he would stay a maximum of 5 years. He is really stretching himself for this flat as a single person purchase. It’s manageable but worries that in a few years it would be worth less than he paid. There is another property in same building but no garage or floored loft that is slightly smaller floor space but £15,000 cheaper than the one he wants.

housebuyer143

Iiyama said:

As ever, interesting guidance. I would think as first time buyer he would stay a maximum of 5 years. He is really stretching himself for this flat as a single person purchase. It’s manageable but worries that in a few years it would be worth less than he paid. There is another property in same building but no garage or floored loft that is slightly smaller floor space but £15,000 cheaper than the one he wants.

If he really wants it you can ask to try another lender who might value it higher. That would probably be step one for me and if they then valued it the same he would need to decide how much he wants the flat.

HampshireH

Iiyama said:

As ever, interesting guidance. I would think as first time buyer he would stay a maximum of 5 years. He is really stretching himself for this flat as a single person purchase. It’s manageable but worries that in a few years it would be worth less than he paid. There is another property in same building but no garage or floored loft that is slightly smaller floor space but £15,000 cheaper than the one he wants.

From a resale point of view, garage (guaranteed parking/storage) and boarded loftspace (if allowed to be used) are huge advantages. Especially for a flat where storage and parking are often limited

Khaderbhai

You have to be prepared to walkaway if its not quite right. Could be worth booking other viewings elsewhere just to see what else he can get for his budget. That usually helps clarify if its worth it 

Newbie_John

So if the main property is for sale for £100k, has been valued to be worth £85k, then the other property is £85k - but doesn't include neither garage nor loft.. then I would assume surveyor will undervalue it again to be worth £75k.

Have you checked on Zoopla what people paid for it in the past? If the owner paid £100k then I'm not surprised they won't go lower. 

Iiyama

Newbie_John said:

So if the main property is for sale for £100k, has been valued to be worth £85k, then the other property is £85k - but doesn't include neither garage nor loft.. then I would assume surveyor will undervalue it again to be worth £75k.

Have you checked on Zoopla what people paid for it in the past? If the owner paid £100k then I'm not surprised they won't go lower. 

In 2019 the flat sold for £70,000. That’s the last record I can find of it being sold.