90% mortgage changed by bank to 80% can i renegotiate price?

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television

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I was originally approved for a 90% mortgage 6 months ago. Decided to wait before buying. Found perfect house. Bid 300000E. Went back to bank and they now say max they will give is 80%. I cant make up the difference but I have already made an offer to the builder based on the 90%. I can raise 40 grand for the deposit.

Can I say to builder will he accept the 40 grand from me and take 240000 from bank.

Appreciate any thougths
 
television said:
I was originally approved for a 90% mortgage 6 months ago. Decided to wait before buying. Found perfect house. Bid 300000E. Went back to bank and they now say max they will give is 80%. I cant make up the difference but I have already made an offer to the builder based on the 90%. I can raise 40 grand for the deposit.

Can I say to builder will he accept the 40 grand from me and take 240000 from bank.

Appreciate any thougths
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You are confusing two issues.

1. What vendor wants and what you are willing to pay
2. What the bank will lend you.

They are two separate issues.

You only have access to 280K and not 300K so you cannot pay 300K. You can ask the builder to renegotiate a lower price and he may do so. Or he may not. You will not be asking him to take 240K from the bank - you will be saying that 280K is the maximum you can pay.

You can certainly ask.

mf
 
Yes but essentially if I renegotiate the price to 280000 the max the bank will give me is 224000 which will still mean a shortfall for me.

The only option I have is to ask the builder to keep the price at 300000 for the purpose of getting 240000 from the bank and then giving him 40000 instead of the 60000. Is the senario possible?
 
television said:
Yes but essentially if I renegotiate the price to 280000 the max the bank will give me is 224000 which will still mean a shortfall for me.

The only option I have is to ask the builder to keep the price at 300000 for the purpose of getting 240000 from the bank and then giving him 40000 instead of the 60000. Is the senario possible?
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Won't work. The Bank will only lend you a percentage of the actual price and that figure should tally all the way through the process. Plus the builder would be showing an incorrect figure on his side if he did what you wanted.

I think you might have to
A. Wait and save.
B. Hope someone will give you a present of some money.

mf
 
mf1 said:
Won't work. The Bank will only lend you a percentage of the actual price and that figure should tally all the way through the process. Plus the builder would be showing an incorrect figure on his side if he did what you wanted.

I think you might have to
A. Wait and save.
B. Hope someone will give you a present of some money.

mf
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are you absolutly positive? Surely the builder can just take the 40 grand instead of the 60? What is in it for him to loose the sale?
 
The bank will give 90% of the lower of the valuation or the contract price.
The builder will have to agree to fudge the contract price at 300k when it is in fact 280k. Not too clever.

Have you tried another lender?
Many still give 90% mortgages.

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You have 40,000 and this will represent 20% of the cost - as the bank will only lend you 80% - then the maximum you can pay is 200,000 ie your 40k plus 160k mortgage.
 
jpd said:
You have 40,000 and this will represent 20% of the cost - as the bank will only lend you 80% - then the maximum you can pay is 200,000 ie your 40k plus 160k mortgage.
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ONly one slight problem. Builder wants 300000 so what your point?
 
NorfBank said:
The bank will give 90% of the lower of the valuation or the contract price.
The builder will have to agree to fudge the contract price at 300k when it is in fact 280k. Not too clever.
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Why would it be not to clever from his point of view. He is getting the sale?
 
television said:
Why would it be not to clever from his point of view. He is getting the sale?
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Everyone involved would have to be "in" on the fraud. The fraud here is on your bank. Everyone would have to lie about the purchase price so that you would get your loan. You would have to have a side agreement between you and the builder confirming that notwithstanding that the contract says one thing, the reality is different.

Given that contracts are supposed to reflect the actuality so that a Court can and will adjudicate in the event of all too common falling outs , the barefaced duplicity necessary here to "get" the deal across the line just does not work for most of the people involved.

If the parties cannot stand over the contract, they should not enter it.

mf
 
Think rationally your argument sounds too lame and is self serving. No vendor in right mind will ever agree too be a part of your arrangment as consequences can be devastating for you if anything went wrong.
This mentality have got hundred of thousands in trouble and you are actually thinking you will be smart even if you will pull this. If you can't afford it dont take the plunge there is still downside in property prices in near future what favour are you doing to yourself by indulging yourself in this.
Think about future enhance your savings and only commit to a property you can afford. Even if you can pull this what about legal fees, furnishing, house work involved in the property have you even given it a consideration.
 
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