What value is LTV based on?

scottbeth

Hi,

We are looking to purchase a house at offers offer £179,000 with final price being around £195,000.

From a mortgage point of view what is the value that the lenders are likely to use for LTV?

Sorry this sounds daft but we haven't done this before and I am totally .

Thanks

clutton_2

the value of the property you are buying will be determined by the Lenders Valuation report. This may well be different to the purchase price.

scottbeth

thanks for replying - is the lenders valuation report likely to be higher than the o/o price?

Toto

I thought the LTV was based on either purchase price or valuation, whichever is the lower of the two.

PasturesNew

LTV is based on the valuation the lender puts on the property.
And how much of that valuation you actually want

Toto

So, if a house is valued at 200k and I offer 180k surely I would still need to pay the 10% deposit. In other words I couldn't negotiate on asking price to cover the deposit? Thats why I thought it was whichever value was the lower.

Conrad

Scotbeth - in this climate you will be lucky the valuer even agrees with the price you pay.
Remember its the lenders asset as long as a mortgage is secured on it. They need to be sure that if you get repossessed and wreck the property (common with repos), that they will get thier mortgage sum back after deductions for court fees, balifs, lock smiths and so on.

95% mortgages will likely be a thing of the past shortly.

scottbeth

Conrad - thank you were are totally new to this and appreciate all advice. Offers over is just so confusing. We are looking to pay purchase price of £195,000. Of which we have around 5% deposit after paying associated fees. But are concerned that lenders value below this amount and then cant get a 95% mortgage. Is the only way we will find this out after we have had an offer accepted and lender has it valued?