I have a question about buying a house

[ssd]

If the property is advertised as offers over £200,000 and the home report says its valued at £220,000 but we offer £250,000, do we need cash for the deposit and £30, 000 cash for the difference between our offer of 250,000 as its 30,000 over rhe home report, or do we get a mortgage for £225,000 and put down the 25,000 deposit?

Bump

I believe the bank won't give you a mortgage for more than the Home Report value. So you would need the deposit plus the £30k you have offered over the value.

I dont think you can get a mortgage above the amount the bank deems suitable for a property, so you'd need the extra 30k basically. I could be wrong but I'm sure that's the case.

God this is awful. I thought you just needed the cash deposit!

Why are you offering £250.000 if valued at £220,000 and they are happy with over £200,000

Is this Scotland?

Not only will you need to put in the cash but a lot of banks won’t like this especially from a first time buyer. You’ve overpaid for “their” asset which makes it higher risk even if they didn’t provide the funding

Unless you can get them to value it higher, then yes, the bank will only lend the agreed percentage of the home report

Yes

Do homes usually sell for the value of the home report then?

Why did you offer 250? Go back to the vendors and offer the value of the report.

@ssd Are you in Scotland? Sounds like you likely are. Yes, in that scenario you would need your deposit plus any difference between what it’s valued at and what you offered.
So you’d be looking at £30k for the difference plus £22k for the deposit - provided that the bank is happy to go on a 10% deposit.
Also remember all your fees etc that will need to be paid.
The banks won’t lend you more than what the property is worth.

The bank won’t lend more that the property is worth. If you don’t pay they take the house. If they lend 250k and the house is only worth 220k they would be 30k out of pocket if it got repossessed. No bank will risk that.

In Scotland it’s very common for properties to sell for roughly 10% over home report value, but yes you will need the % deposit plus however much over home report you go as a deposit.

So using your example if you are buying with 90% LTV then you would need £22k (10%) plus £30k for the offer over.

@ssd Completely depends on what area you’re in and how the market is at the time. Our current house was valued at £260,000. We ended up having to go to £285,000 to get it meaning we needed a £26k deposit and £25k for the difference - plus then all the fees etc.

Are you comfortable saying roughly what area you’re in? People might be able to advise better based on that.

Why didn't you offer just over £200,000

In Scotland you would really struggle to get a property for HR value, the offers over system and general shortage means that properties sell for more the HR value and most properties now will go to closing date with multiple buyer bidding, it’s a very difficult system especially for FTB

Roughly how much would the conveyancing fees be?

Cos Scotland

This sounds like a nightmare and a bit late to be asking! I take it you have now secured the property and you will lose money if you back out?

Any chance of a renegotiation?

@ssd I’d budget a couple of thousand for fees etc. And you’ll have the land tax to pay as well I believe. I think it’s about 2% on properties in that kind of price bracket.

Have you had an offer accepted at £250,000?

No im just asking about it, at this stage

@ssd I know a few first time buyers who have been caught out thinking they could just take out a mortgage for whatever amount they offered. Good luck with the house hunt 😊

Thank you

U wld have to find the £30k and I believe on top of your deposit. Bank will only give u a mortgage for the home report value less ur deposit.

It depends on the area. Some places you could negotiate and get it below home report value if no one else was interested and it maybe needed a few things done. We sold ours at home report value which was pretty gd (I wld have taken less) and we bought for a few thousand below home report value on the next property.

If it’s a sought after area though then it can be as much as 25% above home report value. I’ve known so many friends lose out on house after house (even with parent help) eventually settled for somewhere else that they cld buy it at the home report value.