mortgages based on valuation

crisp

I have been offered a property for 80% of market value if I can complete within 6 weeks. I have checked out with the land registry and local agents what the typical price is for this property on this street and the discount is genuine.

Which mortgage lenders will lend based on valuation and not on exchange price?

thanks

payless

You might get one of the expensive bridging companies to do it , then after completion apply for a remtg, as these are based on valuation, BUT if it does not come up on remtg valuation ( or you don't meet criteria) then you could be left with a very expensive loan , and possibly even a deadline to repay

Robert_Sterling_3

At first sight you seem to have a bargain.
I would pay for a valuation were I in a position to buy a house for 80% of the valuation.

crisp

hello and thanks for replies. but that is my point, which lenders would offer to lend on valuation?

HGLTsuperstar

They will pay on the sale price, not the valuation. The difference is your equity

crisp

superstar...not sure you fully understand the point Im making . if you buy at £85k, but the property is worth £100k and you get a 85% mortgage based on valuation then you receive £85k and £15k is your equity.

I know there are lenders (not many) that use this basis...

MarkyMarkD

No, if you buy a house for £85k it's worth £85k. The value of a property is what someone (i.e. you, in this case) will pay for it - not some spurious value the vendor chooses to pretend it's worth.

That's why lenders lend on lower of price paid and valuation.

payless

I have been told in the past by a bridging packager , that this situation ( albeit I would expect greatser margin or some personal deposit to lower LTV a bit ) can be done - at a premium interest rate - although never done it myself .

Obviously one should ensure that all details on lenders application are completed correctly

HGLTsuperstar

crisp wrote:

superstar...not sure you fully understand the point Im making . if you buy at £85k, but the property is worth £100k and you get a 85% mortgage based on valuation then you receive £85k and £15k is your equity.

I know there are lenders (not many) that use this basis...

No I do understand what you're saying, just because I said what you didn't want to hear. If you buy at 85K, then they will give you 85%, 95% whatever of the sale price!

crisp

I have received a PM with 2 lenders that will lend on valuation and I have confirmed it with them.

theGrinch

PM me and I will put you in touch with my broker