Mortgage valuation question

[mx stu]

We have essentially been offered first refusal on a repossessed property, given our 'hot to trot' (their words not ours) status by the agent (sold and completed on our house, mortgage agreed to give us a £250k budget, living with the in-laws, ready to pounce).

The agent views the house as being worth close to £300k if it were on the open market i.e. if you weren't in a rush to sell. The bank want £245k for a quick sale (fixed, no offer considered).

Now when it comes to mortgage valuation purpose could we propose it being worth say £300k to reduce our LTV or is the valuation essentially what we (may) pay for it.

[Jockman]

Your valuation is what your lender says it is - what the Estate Agent and the Bank say is merely indicative.

Sarnie will be along in a minute....he's just having a butty

[mx stu]

Jockman said:

Sarnie will be along in a minute....he's just having a butty

Very good.

Looking at the sums all we would need to do is put the value up to nearer to £260k, pull out an extra £10k to give us the money to make some changes.

[Sarnie]

The mortgage lender will use either the purchase price or the market value, which ever is lower

[mx stu]

Sarnie said:

The mortgage lender will use either the purchase price or the market value, which ever is lower

Boo. Even if it's a distressed sale?

I put a call in to First Direct whom we have a mortgage agreed up to the point of finding a house with and they said its whatever the valuer values it at. I didn't think that was quite right as my thinking was more along the lines of what you say.

The more I read about repossessions I'm getting wary.

[Jockman]

mx stu said:

I put a call in to First Direct whom we have a mortgage agreed up to the point of finding a house with and they said its whatever the valuer values it at.

That's my experience of how it works, but I'm not getting into a dispute with a mortgage broker

[Sarnie]

mx stu said:

I put a call in to First Direct whom we have a mortgage agreed up to the point of finding a house with and they said its whatever the valuer values it at. I didn't think that was quite right as my thinking was more along the lines of what you say.

I called Santander, just to clarify before posting. Also, if you proceed with a normal valuation the valuer will rarely, if ever, value the property higher than what you are purchasing it for. All he will do is either agree with your figure or inform the lender if he thinks it's worth less.

You could potentially benefit when you came to remortgage though as you may be able up the valuation figure accordingly at that time, however your purchase price will be detailed on the Land Registry and sites like Zoopla so you will need comparable evidence to show that your property is actually worth £300k and not the £245k you bought it for.....