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Mortgages - Can I borrow what the house is worth or what I actually pay???

  • 26-03-2009 8:42pm
    #1
    freddo15
    Registered Users, Registered Users 2 Posts: 7 ✭


    Appreciate if anyone can help with this...

    Im looking to get on the property ladder and get my first place and im shopping around for places at the moment. There is a good few places about that seem to be very much priced to sell in that they are on the market for at least 10% less than what they are actually worth. What I want to know is - if I get a house valued at €200,000, but the seller will take €180,000, will the bank give me a mortgage for €200,000? (obviously thats 92% borrowed + my deposit making the full 200k) ?????

    Anyone been in this boat???:confused:


Comments

  • #2
    BankMan
    Closed Accounts Posts: 143 ✭✭BankMan


    They base the 92% or whatever loan to value ratio on the purchase price, as it is assumed that the purchase price represents a fair valuation of the property. Afterall the value of anything is what someone is prepared to pay for it.

    You'll have to find balance yourself.


  • #3
    killers1
    Registered Users, Registered Users 2 Posts: 1,443 ✭✭✭killers1


    freddo15 wrote: »
    Appreciate if anyone can help with this...

    Im looking to get on the property ladder and get my first place and im shopping around for places at the moment. There is a good few places about that seem to be very much priced to sell in that they are on the market for at least 10% less than what they are actually worth. What I want to know is - if I get a house valued at €200,000, but the seller will take €180,000, will the bank give me a mortgage for €200,000? (obviously thats 92% borrowed + my deposit making the full 200k) ?????

    Anyone been in this boat???:confused:
    If you get the house valued @200k and the purchase price is 180k and you borrow 200k then you have borrowed 111% finance! The majority of banks look for the solicitor to confirm the contract price and base the loan to value on that. So if a price is agreed @ 180k and the bank will only give 92% of the purchase price you can borrow 165,600 and you would need to put 14,400 towards the purchase price i.e. 8% deposit being the difference between purchase price of 180k and loan amount of 165,600. One or two of the banks operate off the valuation report solely and don't require the solicitor to confirm contract price so in theory you could get 90% of 200k (i.e. 180k)presuming the valuation report was for 200k


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