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Query About LTV and Amount Required When House is Going for More Than Valuation

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  • 01-03-2015 8:02pm
    #1
    hadoken13
    Registered Users Posts: 630 ✭✭✭


    I'm always unsure when trying to calculate the amount we would need to buy a house when the asking price is more than the valuation.

    For instance, a house we are currently looking at is on sale for €165,000. It's being sold by a receiver, owned by AIB, and the valuation of houses in the estate (same types of houses) is the same as the asking price. This house was on offer for €150,000 last year (our bank valued it at this price) and we had an offer of €175,000 but the house eventually went for €180,000. We knew the bank valuation and the fact that we'd need a lot more on top of the deposit, but it looks like the young couple that made the offer perhaps didn't realise this - or as it was being sold by a receiver, there may have been other complications and the sale never went through.

    So, if we were to go up to €175 - 180,000 what would we need to have saved? Details are:
    Asking price: €165,000
    Possible selling price: €175 - 190,000
    Bank valuation: €165,000
    First-time buyers: Yes

    My estimation would be the mortgage would be valuation less 10% i.e. €148,500 if the banks gives us a 90% LTV mortgage with a €16,500 deposit. Then we'd need to make up the selling price minus the mortgage i.e. €175 - 180,000 minus €165,000: €10,000 - 15,000 + 16,500 (deposit) = €26,500 or 31,000. Would this be right?


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    #2
    Victor
    Registered Users Posts: 78,310 ✭✭✭✭Victor


    Essentially yes. The bank is going to take the valuation and apply the relevant ratio. Anything else is paid by the purchaser.

    Note that the valuation is a year old and the bank may look for / accept a new valuation.


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    #3
    hadoken13
    Registered Users Posts: 630 ✭✭✭hadoken13


    Victor wrote: »
    Essentially yes. The bank is going to take the valuation and apply the relevant ratio. Anything else is paid by the purchaser.

    Note that the valuation is a year old and the bank may look for / accept a new valuation.

    Thanks.

    No that's the latest valuation, it was valued at €150,000 and it's now around the €160,000 - €165,000 mark.


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    #4
    Victor
    Registered Users Posts: 78,310 ✭✭✭✭Victor


    hadoken13 wrote: »
    Thanks.

    No that's the latest valuation, it was valued at €150,000 and it's now around the €160,000 - €165,000 mark.
    Then they will give you X% of €160,000 - €165,000.


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