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Valuation - does this determine the Loan amount?

  • 01-04-2017 7:48am
    #1
    jayjay2010
    Registered Users, Registered Users 2 Posts: 505 ✭✭✭


    Quick question, if someone was to buy a house for 220k and is approved for say 200k in principle and have a deposit of 20k, and the valuation report says that the property is only worth say €200k, will the lender still give out the full €200k as approved or would they take the borrowers deposit into account and give less of a loan?

    In other words, if the value of a property you are buying is not what the valuation reporter says it is, will they still give you the full Approval value and you make up the difference i.e.:deposit.

    I hope this makes sense!


Comments

  • #2
    Gumbo
    Moderators, Society & Culture Moderators Posts: 40,349 Mod ✭✭✭✭Gumbo


    jayjay2010 wrote: »
    Quick question, if someone was to buy a house for 220k and is approved for say 200k in principle and have a deposit of 20k, and the valuation report says that the property is only worth say €200k, will the lender still give out the full €200k as approved or would they take the borrowers deposit into account and give less of a loan?

    In other words, if the value of a property you are buying is not what the valuation reporter says it is, will they still give you the full Approval value and you make up the difference i.e.:deposit.

    I hope this makes sense!

    They will revise the loan offer amount down to reflect their valuation and to keep you compliant with the CB Rules.


  • #3
    jayjay2010
    Registered Users, Registered Users 2 Posts: 505 ✭✭✭jayjay2010


    kceire wrote: »
    They will revise the loan offer amount down to reflect their valuation and to keep you compliant with the CB Rules.


    Ok and what about in this scenario:

    A first time buyer is sale agreed on a house for €200k. They are approved in principle for 160k and they are paying the remaining 40k with a large cash deposit.

    The valuation says the house is only worth €180k. Will the bank now still lend the 160k (as the buyer is still going to pay the remaining 40k with a cash deposit.)

    The bank are still technically within their rules of 90% max for a FTB, however the valuation doesn't state that the property is worth what the buyer is prepared to pay for it.

    Will the bank insist that the client pays less for it or will they still lend the full €160k as this would still be within their FTB rules?


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