Advice for a slightly clueless FTB - bank valuation

cmor234

Hi all,

I have recently gone sale agreed on a house in Dublin and now in process of organising a valuation for the mortgage provider. The house is over 100 years old and needs some updating but for the most part it is structurally sound. I have a deposit that leaves me with a mortgage of about 82%. I am wondering if the values just values it against the cost of the mortgage (as security), or the full price I am buying it for.

This is probably a very stupid question so apologies in advance !

herbalplants

https://www.boards.ie/discussion/2058296391/advice-for-a-slightly-clueless-ftb-bank-valuation

Congratulations on sale agreed.

When they value, they value against the full price of the house.

dennyk

I am wondering if the values just values it against the cost of the mortgage (as security), or the full price I am buying it for.

The valuation will determine the full value of the house, as the appraiser calculates it. This has no direct relation to the purchase price (other than both being influenced by the same general factors such as the market and the condition of the property). The valuation might determine that it's worth more than the total price you're paying for it, or they might determine that it's worth less. (The latter is quite common in a booming market where bidding wars are common and valuations might be lagging behind reality a bit...) If it does end up being valued less than you're paying for it, you can still buy the property for that price, but the bank is only going to issue a mortgage for 90% of the value at most, so you might end up having to put down a larger deposit to make the purchase (or to retain the necessary LTV ratio to get the interest rate you were looking for, if you were putting down more than the minimum to get a better rate).