Just a quick rant on something that's silly, but has been annoying me for a while...
When I bought my flat I paid £116,000 (auction, repossession). It was probably worth about £130,000ish.
When I had the valuation done (before the auction), the mortgage advisor said we'll ask the surveyor to value at a max of £125,000 (as my max bid at auction was going to be £125,000).
The valuation came back and the surveyor said it met £125,000. But he didn't say how much it was actually worth...
I won the auction and put down a little over 10% to leave just under £104,000 outstanding on the balance. Pretty much exactly 90% of £116,000.
However the V stands for value not price. Why then do the Halifax (and all others I assume) use the price paid to determine the loan to value (LTV)? When they know the value was more than £116,000. In reality they shouldn't need to worry about what I was paying the seller - just the loan to value to ensure they are lending sensibly?
In a fair world, they have seen the flat was worth £130,000 - I wanted to borrow £104,000 and that should've unlocked the 80% LTV products. In reality they used the price I paid for the calculation meaning I'm stuck at a lofty 6.49% for another 16 months. :(
LTP - 'Loan to Price' for new buyers. And LTV - 'Loan to Value' when re-mortgaging? Would that be a fair assessment?
When I bought my flat I paid £116,000 (auction, repossession). It was probably worth about £130,000ish.
When I had the valuation done (before the auction), the mortgage advisor said we'll ask the surveyor to value at a max of £125,000 (as my max bid at auction was going to be £125,000).
The valuation came back and the surveyor said it met £125,000. But he didn't say how much it was actually worth...
I won the auction and put down a little over 10% to leave just under £104,000 outstanding on the balance. Pretty much exactly 90% of £116,000.
However the V stands for value not price. Why then do the Halifax (and all others I assume) use the price paid to determine the loan to value (LTV)? When they know the value was more than £116,000. In reality they shouldn't need to worry about what I was paying the seller - just the loan to value to ensure they are lending sensibly?
In a fair world, they have seen the flat was worth £130,000 - I wanted to borrow £104,000 and that should've unlocked the 80% LTV products. In reality they used the price I paid for the calculation meaning I'm stuck at a lofty 6.49% for another 16 months. :(
LTP - 'Loan to Price' for new buyers. And LTV - 'Loan to Value' when re-mortgaging? Would that be a fair assessment?