How is mortgage deemed less than 60% of value?

Hi,

I agreed the price on a house I'm buying over a year ago. Due to legal problems it took a while to get to the point of signing contracts. Due to probate issues the sale hasn't yet closed but, in theory, should close soon. I believe the value of the house has increased since we agreed the price and, using a property that sold recently on the same street as a guide, my mortgage may now be less than 60% of the value of the property. I have not drawn down the 3.1% tracker I've been approved for. My question is how does a bank value the house to decide if I would qualify for the lower interest rates (NIB's 2.8% tracker in particular)?

Thank you.

Brouhahaha said:

Hi,

I agreed the price on a house I'm buying over a year ago. Due to legal problems it took a while to get to the point of signing contracts. Due to probate issues the sale hasn't yet closed but, in theory, should close soon. I believe the value of the house has increased since we agreed the price and, using a property that sold recently on the same street as a guide, my mortgage may now be less than 60% of the value of the property. I have not drawn down the 3.1% tracker I've been approved for. My question is how does a bank value the house to decide if I would qualify for the lower interest rates (NIB's 2.8% tracker in particular)?

Thank you.

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AFAIK its taken on the valuation or sale price , which ever is lower....

Dang - the sale price would mean I wouldn't qualify. Thanks anyway.

i was wondering how that worked too. i bought a house last year (mortgage was about 95% of price) and had to totally renovate it. Judging by house prices in the area recently the mortgage may only be about 70% of the house value now.

I thought that at some point I could get a valuer who the bank recognise in to value the house (for a fee of about €127) and then the bank would give me the benefit of the better LTV mortgage rates.

Is this not the case? Will the Value in LTV always be the price I bought the house at?

ANC said:

Will the Value in LTV always be the price I bought the house at?

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Short answer - no. About 1 year after buying our house we decided to switch to a tracker mortgage. Got the house re-valued at approx €50K over what we paid for it and the bank accepted this as the value for LTV tracker.

Banks will get away with what they can. If your credit history is good and you are able to make repayments NIB wont want to see you walking out the door. Get approval elsewhere and go back to NIB and look for the better rate.

Brouhahaha said:

Dang - the sale price would mean I wouldn't qualify. Thanks anyway.

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I wouldn't give up on it that easily. I suspect you could persuade NIB to agree to a <60% LTV if you get a valuation to back that up despite the purchase price.

On a slightly similar vein, house up a bit kess than a year, lot of finishing, decoration & landscaping done ..... lot done, more to do !

Mortgage probably originally 85% or so of value (own site & self-build (kinda)). Could now be in the 60% category with a good valuation.

Mortgage is a current account one so, in theory, could shoot back up to 100% (e.g. have to have level term life assurance for this reason - bit dearer but great financial flexibility). In this case is there much prospect of them agreeing a <60% ltv, given what could happen in the future??

Current account mortgage works well I think - meaning to crunch the no's with ages and with competitor in market then potential to bargin with first active.

just as an update my earlier post. i was just talking to AIB and they said that to give them a new value for my house (and therefore get onto the best tracker rate) all i would need to do is get an estate agent to write up a letter (a one liner would do she said) stating the current value of the house.

so no need to get a valuer at all (for €127)