Mortgage money

andys15

Hi
I have just had my mortgage offer approved, for a house I am in the process of buying. I am a FTB.
We originally agreed on a price with the seller, which is what I have the mortgage for. I have since negotiated a lower price, and wondered wether I could use the extra money agreed for the mortgage for home improvements. The valaution is valued at the original price agreed.
I dont want a discussion about houses going even further down in value, and my LTV worsening, as I am well within my means, with my payments. I just want to know if it is any way possible for me to have the extra money as hard cash.

Thanks in advance

homer_j_3

your solicitor will have to advise that the purchase price has changed and the lender will normally lend on the lower of purchase price or valuation.

That said, it is possible for you to keep this money if the amount you are borrowing is still within the LTV limits.

Reds-on-Sea

I'm in a similar situation, I got my survey back, it just had very minor points that needed sorting out, some brick repointing and 1 roof tile etc. Anyways, I asked the vendor to do the work themselves, as knocking money off the price is all very well but doesn't leave me with the cash in my hand to do the work. They have decided to knock £1k off the price (which apparently is small enough not to bother changing my mortgage amount for) and they're basically going to sell it to me for the same amount, but pay £1k towards my deposit (So I get to keep £1k of my cash). You pay them the same amount to them and keep £1k back for your repairs. I suppose it depends how much you've negotiated off and whether it's legal to keep your mortgage the same amount.

andys15

Reds-on-Sea wrote: »

I'm in a similar situation, I got my survey back, it just had very minor points that needed sorting out, some brick repointing and 1 roof tile etc. Anyways, I asked the vendor to do the work themselves, as knocking money off the price is all very well but doesn't leave me with the cash in my hand to do the work. They have decided to knock £1k off the price (which apparently is small enough not to bother changing my mortgage amount for) and they're basically going to sell it to me for the same amount, but pay £1k towards my deposit (So I get to keep £1k of my cash). You pay them the same amount to them and keep £1k back for your repairs. I suppose it depends how much you've negotiated off and whether it's legal to keep your mortgage the same amount.

original price 246000 mortgage agreed 233700 ie 95%
new price 240000 mortgage 228000
so is there anyway i can keep the £5700 as it works outas about £30 osh a month extra

Reds-on-Sea

My solicitor informed me that "if it's only 1 or 2 grand then you don't need to tell the mortgage company" yours is a bit ore so I don't know...

I think the official name for what the vendor and I are doing is called "paying us an allowance" for works. Ask your solicitor about it, see what they can arrange, as they need to write up some kind of form to make sure everyone keeps to the deal.

I guess it depends on what's more important to you, a smaller mortgage or the cash in your hand to do the works. Maybe you can reduce the price so that you can get the maximum allowance available, i.e. official selling price £243k, but they pay £3k of your deposit, so you get to keep £3k back of your deposit. The mortgage is still the correct LTV and you have the cash.