Done mortgage application wrong

gadget88

I am paying 25 thousand over home report how do I add this to figures online? 

lfc321

Hard to work out exactly what the issue is without more details.  If you are paying £25k over the bank’s valuation of the property, then you will need to increase your deposit by £25k. 

Here’s an example:

Imagine you have decided to pay £125k for a property the bank values at only £100k. 

Likely they will lend you only £90k (90% of what they value the property at). 

That would mean you would need a deposit of at least £35k. 

In this scenario, the answers to those two questions would be:

Approx price of property: £125,000
Deposit: £35,000

This would leave you with a mortgage of £90,000.  

Does that help? 

Exodi

As @lfc321 says, what you pay for the house is somewhat irrelevant to the bank - they will applied their own valuation to house in which they'll consider their lending on.

It might be that they can offer you more money (by moving to a higher LTV (maxing out at around 90%-95%) at a higher rate) but to follow on from lfc321's example, if you only had a £10k deposit, the banks are obviously not going to lend you £115k on a house they value at £100k (because if you went bankrupt and they repossessed the house, they anticipate that they wouldn't get all of their money back. That's why lower LTV's come with lower rates - it reflects the risk the bank will make a loss in the event of a repossession, it's also why 60% LTV is generally the floor because at that point the risk of a loss is negligible).

Hoenir

The lender will base their mortgage offer on their internal valuation of the property. The difference between this and your offer price will have to be funded out of your own pocket.