Downvalue and mortgage payments

antony2395

Hello all,

we recently made an application with nationwide for a property for £170k (22k deposit and 148k loan).

nationwide did a valuation and found the house to worth 165k instead of 170. Seller did not want to go lower, so we decided to fork out the extra 5k as we quite liked it. Does that mean that our deposit will now be 27k and the loan will be 143k? That means that our payments every month need to be lower if nationwide approves the mortgage. 

Our mortgage advisor is saying that the mortgage figures will remain the same so the monthly payments will remain the same?

which seems wrong to me? Unless I am missing something? 

DE_612183

yes, you've borrowed less so the mortgage payments should be less.

Ayr_Rage

Yes, you are missing this fact.

You will only pay less to NW for the mortgage if they do not advance you the 148k that you are applying for.

You are not forking out any extra, the original figures stand and you pay a total of 170k.

la531983

About to say, the vendor ignoring the valuation and whacking the price back up to 170k affects nothing, you still have a 22k deposit and therefore the mortgage needs to be 148k

If you want a smaller mortgage, pay a bigger deposit.

MWT

antony2395 said:

Our mortgage advisor is saying that the mortgage figures will remain the same so the monthly payments will remain the same?

which seems wrong to me? Unless I am missing something? 

if the lender is still happy to offer £148k for the mortgage then nothing has changed.

At a valuation of £170k or £165k you are still going to be a little under 90% LTV, so the lender will have confirmed they are able to offer what you asked for as there was no change in the product you applied for...

This should be in the offer letter they sent. .

Ayr_Rage

DE_612183 said:

yes, you've borrowed less so the mortgage payments should be less.

Oops !

They haven't said they intent to up their deposit and reduce their mortgage.

The 165k valuation is a red herring here unless NW reduce the mortgage offer.

antony2395

Ayr_Rage said:

Yes, you are missing this fact.

You will only pay less to NW for the mortgage if they do not advance you the 148k that you are applying for.

You are not forking out any extra, the original figures stand and you pay a total of 170k.

Yeah that’s what I mean I know the total will be 170k but the monthly payments should come down! 

Ayr_Rage

antony2395 said:

Ayr_Rage said:

Yes, you are missing this fact.

You will only pay less to NW for the mortgage if they do not advance you the 148k that you are applying for.

You are not forking out any extra, the original figures stand and you pay a total of 170k.

Yeah that’s what I mean I know the total will be 170k but the monthly payments should come down! 

ONLY if NW will not advance you the 148k you applied for !

What EXACTLY are NW lending you ?

la531983

antony2395 said:

Ayr_Rage said:

Yes, you are missing this fact.

You will only pay less to NW for the mortgage if they do not advance you the 148k that you are applying for.

You are not forking out any extra, the original figures stand and you pay a total of 170k.

Yeah that’s what I mean I know the total will be 170k but the monthly payments should come down! 

Only if you ask NW to lend you 143k instead and you pay 27k

Have you asked them to? You don't have to, if they are happy to lend you 148k just crack on. 

Ignore the valuation here and the fact you are paying 5k more than it, it's meaningless. 

kingstreet

antony2395 said:

Hello all,

we recently made an application with nationwide for a property for £170k (22k deposit and 148k loan).

nationwide did a valuation and found the house to worth 165k instead of 170. Seller did not want to go lower, so we decided to fork out the extra 5k as we quite liked it. Does that mean that our deposit will now be 27k and the loan will be 143k? That means that our payments every month need to be lower if nationwide approves the mortgage. 

Our mortgage advisor is saying that the mortgage figures will remain the same so the monthly payments will remain the same?

which seems wrong to me? Unless I am missing something? 

You were paying £170,000 and borrowing £148,000 so your deposit was £22,000. Your loan to value was 87.05% based on the agreed price.

You are paying £170,000 and borrowing £148,000 so your deposit is £22,000. Your loan to value is 89.69% based on the valuation.

Your product remains the same as you are not moving into a higher LTV band as MWT stated.

Ergo, your payments remain the same.

la531983

kingstreet said:

antony2395 said:

Hello all,

we recently made an application with nationwide for a property for £170k (22k deposit and 148k loan).

nationwide did a valuation and found the house to worth 165k instead of 170. Seller did not want to go lower, so we decided to fork out the extra 5k as we quite liked it. Does that mean that our deposit will now be 27k and the loan will be 143k? That means that our payments every month need to be lower if nationwide approves the mortgage. 

Our mortgage advisor is saying that the mortgage figures will remain the same so the monthly payments will remain the same?

which seems wrong to me? Unless I am missing something? 

You were paying £170,000 and borrowing £148,000 so your deposit was £22,000. Your loan to value was 87.05% based on the agreed price.

You are paying £170,000 and borrowing £148,000 so your deposit is £22,000. Your loan to value is 89.69% based on the valuation.

Your product remains the same as you are not moving into a higher LTV band as MWT stated.

Ergo, your payments remain the same.

I don't think the OP was confused about LTV, for some reason he thinks he has to pay more of a deposit, and therefore a smaller mortgage, because the vendor has ignored the valuation and added 5k to it. 

Which isn't the case.