Equity advice?

[StripeyChina]

If a property is valued at £135K (surveyor) but purchased at 95K
does this mean there is 40K 'equity' or is the market value 95K?

The equity is the difference between what you sell for and any outstanding mortgage. If you have no mortgage, what you sell for is the equity in its entirety.

Your equity is how much your house is worth if sold, minus your mortgage. So presuming you own it outright and the house is worth 135k you have 135k’s worth of equity. If the outstanding balance on your mortgage is 35k and it’s worth 135k your equity is 100k. Make sense?

bump

yes (sorry for bump- hadn;t refreshed properly)

so in this case it would just be good value rather than have (paper?) equity as i'd be buying not selling

Are you saying that you’ve had an offer accepted on a property at 95k and your mortgage valuer has valued it at 135k? If so your bank will be able to tell you how much equity they think you will have upon completion and also your LTV (loan to value) ratio. Check your mortgage documents and you’ll know if they are providing your loan on the basis of the house being worth 95k or 135k. However, your equity only exists on paper until you sell and a house is only worth what someone will pay for it... which in this case is your 95k! But it does sound like you got a good deal.

sorry, only just seen this (been unwell)

Yes.

House Value minus Mortgage Debt = your Equity.

Although, if you're paying £95k for the house, I do not believe it's really worth £135k. Surveyor sounds shit. Your mortgage lender will want their own valuation anyway. And they will calculate their LTV on that, which will determine what deals they offer you.