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Thread: First time house buyer mortgage advice

  1. #1
    Ex-Staff Full Member John LE's Avatar
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    Question First time house buyer mortgage advice

    Ok i'm new to all of this so don't eat me alive

    I have seen a house i'd really like. It's been up for sale for a little while now and has a garage (the best bit )

    The price has now been reduced on the property, it was originally valued at 95k and is now 87.5k.

    I plan to offer 82k (cheeky I know) but am I right in thinking that....when I go for a mortage the house value would be the original 95k meaning I would only need an 86% mortgage?

    Cheers anyone who can shed some light

  2. #2
    spoons
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    Hope this helps a bit.

    When a house is valued by the seller, it doesnt mean that your mortgage lender will value it at the same amount.

    In these times, if you are looking for a high loan to value ratio, it all depends what the LENDER values the property for (which could be a lot less than the sellers valuation)


  3. #3
    spoons
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    Example:-

    Seller wants £87,500

    Your mortgage company might value it at £80,000

    If its valued at £80,000 then thats the 100% capacity the mortgage company will loan against. Not what the seller wants. Its then up to you to find the difference.

    With the climate the way it is, it would be very lucky to find the mortgage lender valuation the same or more than the sellers valuation

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    Regular Member bigcarman79's Avatar
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    i would offer 80K!, Alot of people selling their homes dont want to believe its dropped in value, so asking top money for them, even though its been dropped by 7.5K, doesnt mean to say its worth their new asking price. As its been on the market a while they may also be up for a quick sale.

    Now i dont know what house it is or the values around your area are but just be ready to do some hard bargaining!


    Edit: Just noticed your in scotland so you do the Auction style bidding dont you?

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    Ex-Staff Full Member John LE's Avatar
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    Since i'm sure no-one else will buy it from here this is it



    Not sure how it works down south but we have home reports up here that most mortgage lenders will accept the valuation from. The 95k valuation is on the home report.

    Also I was thinking of offering 80k, worth the shot you think?
    Last edited by Deztroyer; 30th August 2011 at 16:07. Reason: JR'S REQUEST

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    Regular Member m8internet's Avatar
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    Quote Originally Posted by bigcarman79 View Post
    Edit: Just noticed your in scotland so you do the Auction style bidding dont you?
    Yes, that is pretty much how it works, bid/offer via agent or solicitor, seller then puts a closing date and selects one bid/offer

    For the mortagages I have the value is based on the total amount paid
    So if the house is valued at £95K and I offer £80K, then the mortgage is based on the £80K
    However, I place the buildings insurance policy based on the survey valuation (typically £95K or higher)
    I've never had any issue with that, what they will question (not likely to happen at the moment) is where the mortgage is higher than the valuation

    I would perform a basic search of similar properties that have been sold in the last 10 years
    Equally, prices are vastly more stable in Scotland, especially north of the central belt
    So much so that a house next to one I sold at the end of last year has just sold for £3K more than the previous asking price, and mine went for £6K less than asking price (but still £13K more than I had valued it at)

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    Firstly- a mortgage valuer will never over value a first time buy- unless there is a vastly huge difference in asking price and market value. if it was up for 95k and the seller drops the price to 80k in order to sell then the lower price is deemed to be the current market value. they woluld not value it at 95k.
    If it was remortgage then it would be slightly different. they would simply look at local house price movement since you bought the property and then apply that %movement to your previous purchase price, obviously providing your house was still in the same state- IE not falling down nor being greatly improved. they will also cross reference with the most recent sold prices to ensure accuracy.
    the closed bid way of doing things in scotland only applies if there is more than one party interested. If i was you I'd look on a good website like RightMove and look at local prices for something similar. then look at recent sold prices- they list all sales registered at land registries and you may even be able to see what they paid for it if its within the last 7 years.
    Once armed with all the info you can then apply logic and a little bit of cheek when making an offer...

    hope that makes sense :-)

    oops M8innternet was typinfg faster than me lol
    Last edited by FLOB; 27th June 2011 at 11:42.

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    Regular Member marktaylor's Avatar
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    one question

    whats a 2 bedroom terraced villa ????

    it dont look like benidorm to me !!!!!


    but at the end of the day john its a buyers market so go in a s low as you think would be ok , you never know how desperate people are to sell

  9. #9
    Regular Member m8internet's Avatar
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    Quote Originally Posted by FLOB View Post
    the closed bid way of doing things in scotland only applies if there is more than one party interested
    It still applies, even if only one party is interested, providing the sale is openly advertised
    This is to ensure that any potentially interested parties are aware the process has an end date
    A typical example is where a buyer does not view and simply places an offer at 16:59 on a sale that is notified as closing at 17:00 (and it does happen)

    It does not apply if the sale is not advertised (ie a closed sale)
    This is how I tend to obtain my properties
    Typically a house is up for sale and is then withdrawn
    I then contact either the seller (after a previous viewing) or the agent, to enquire further
    I can then place an offer and there is no closing date, and equally the seller can then either refuse, accept, or even negotiate (if the offer is very close)

  10. #10
    Regular Member m8internet's Avatar
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    Quote Originally Posted by marktaylor View Post
    whats a 2 bedroom terraced villa?
    This is a common term in Scotland, to describe a house with a private front and/or back garden, which is solely contained within the property (as outlined on the Title Deeds)
    The opposite would be a flat, which has no garden solely contained within the property (ie common land)

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