Amending our purchase price

[bleachblondemom]

We had a structural survey done on a house we are buying and decided to ask the seller for a reduction of the price, as there are works that will need to be carried out (not absolutely urgent, or to the point of devaluing the house, just that need doing to bring the house back to life a bit). Our offer has reduced from £285k to £281k and has been accepted. We want to keep our mortgage amount the same and take the 4k off our deposit.
I’m now a bit worried that this will affect our mortgage offer! I’ve done a calculation and the LTV will now change from 69.12% to 70.11%. Is this enough to cause a problem and send our interest rate up, or cause the lender to want to offer us less?
DH thinks that as the lender agreed the house value was £285k in their survey, it shouldn’t matter that we are now paying less, but I’m struggling to get a clear answer from Google.

You need to inform your lender, it may be enough to change the interest rate given the change in LTV. But why not reduce your mortgage amount?

Yes we are going to inform them, we have a mortgage broker so we are speaking to them first.
We would rather take the extra 4k now for works that need doing, rather than reduce our mortgage by a tiny amount each month.

You should be able to check your lender's website to see if it changes your interest rate

Might be worth playing with the numbers so you can get the LTV to be 69.99 in case there's something that triggers the change at 70% - at least know in advance and be prepared to go for it if they say going over 70% will change things - for the sake of a couple of hundred pounds you might then get to have some money to use and still keep your cheaper rate...
Knowing the figures up front and making a decision in advance about what you would do if they make any changes means you will know whether or not to accept any proposed changes - much easier to make decisions clerly and calmly in your own time rather than when feeling under pressure when talking to the mortgage company.

We just did this and knocked £5k of our price and we needed a whole new mortgage offer. Our lender is Halifax. I guess maybe other lenders could be different?

We only reduced our offer by £2k but we needed a whole new mortgage offer. It caused a whole bunch of problems which in retrospect I realise we never should have bothered and just stuck with the original price!

Mortgage broker rang back and said it should all be fine, and all they’ll need to do is update the paperwork with the new house price. I guess the next bracket must be 75% or something. Phew panic over!

We had to sell our house less than asking price so our vendors kindly reduced their price by £3500. We had to inform the lender and unfortunately Dh didn't do it in time so we had quite tense days before exchange-completion date.

@Munkki ah that was good of them. Fortunately we’ve got time on our side as no one is ready yet

Normally reducing the ask and the deposit would need a new offer. Perhaps this company is more lenient - but are you sure the mortgage broker isn't playing it down?

It will be a new offer but what I mean is the calculations shouldn’t change, just the purchase price that’s stated on it. From what I gather anyway. I mean yeah he could be talking a load of bollocks but he’s been incredibly helpful so far, I trust that he knows what’s what.

When did you get the original offer? Bear in mind the recent rise I'm interest rates, you may struggle to get another offer at the interest rate you had before so could end up worse off.

I'm sure he knows what he's doing but a new offer will take time to be rubber-stamped.

It was only a few weeks ago and it was done pretty quickly first time. I’ll quiz DH more about what was said on the phone when I get home.

I am in the same boat and just keen to see if you the new offer had a higher interest rate.

@Promise22 no everything stayed exactly the same! I don’t think we went into the next % bracket for it to have an effect