Mortgage - LTV
Discussion
This may be a dumb question....
Assume a house value of £1mn and valuers agree this for the purposes of the mortgage. There is a LTV of 65%, so mortgage is £650,000. Now, at the point of the sale, the seller (for whatever reason) agrees to sell the house for £900,000, what are the implications for the mortgage of £650,000 - given that this is now more than the 65% of the transaction (I would argue still 65% of the LTV). The house is still worth £1mn, but the transaction is for £900,000. Does the mortgage company typically look at the house value or the transaction price - given that they are different.
any thoughts?
Assume a house value of £1mn and valuers agree this for the purposes of the mortgage. There is a LTV of 65%, so mortgage is £650,000. Now, at the point of the sale, the seller (for whatever reason) agrees to sell the house for £900,000, what are the implications for the mortgage of £650,000 - given that this is now more than the 65% of the transaction (I would argue still 65% of the LTV). The house is still worth £1mn, but the transaction is for £900,000. Does the mortgage company typically look at the house value or the transaction price - given that they are different.
any thoughts?
hence an even better LTV of around 61%.pgtips said:
This may be a dumb question....
Assume a house value of £1mn and valuers agree this for the purposes of the mortgage. There is a LTV of 65%, so mortgage is £650,000. Now, at the point of the sale, the seller (for whatever reason) agrees to sell the house for £900,000, what are the implications for the mortgage of £650,000 - given that this is now more than the 65% of the transaction (I would argue still 65% of the LTV). The house is still worth £1mn, but the transaction is for £900,000. Does the mortgage company typically look at the house value or the transaction price - given that they are different.
any thoughts?
For mortgage purposes, the lender will use the purchase price or the value returned by the surveyor, which ever is lower.Assume a house value of £1mn and valuers agree this for the purposes of the mortgage. There is a LTV of 65%, so mortgage is £650,000. Now, at the point of the sale, the seller (for whatever reason) agrees to sell the house for £900,000, what are the implications for the mortgage of £650,000 - given that this is now more than the 65% of the transaction (I would argue still 65% of the LTV). The house is still worth £1mn, but the transaction is for £900,000. Does the mortgage company typically look at the house value or the transaction price - given that they are different.
any thoughts?
So, if you bargain hard and get a good deal when you purchase, when you come to remortgage it bites you on the backside as the new surveyor will use sold property prices as a reference point and your low figure will bring the comparables down.....
What a very strange question.
As I understand the mortgage is secured agaianst the house, so if you sell the house the mortgage contract effectively ends. That's unless you are buying a new house and looking to port the mortgage over. The lender will look at the value:equity for the new property I'd imagine, and if it's not high enough refuse to port the mortgage.
As I understand the mortgage is secured agaianst the house, so if you sell the house the mortgage contract effectively ends. That's unless you are buying a new house and looking to port the mortgage over. The lender will look at the value:equity for the new property I'd imagine, and if it's not high enough refuse to port the mortgage.
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