We're getting a mortgage from UB to buy my partner's mother's rental property. The house is worth 400k but my mother in law will sell it to us for 300k (she is aware of CGT implications for herself and that they will be on the 400k value). We are looking at getting a mortgage of 265k and our savings will make up the difference of 35k. We advised UB of the gift of 100k.
Initially we were being quoted a 2 yr fixed rate of 2.25%. as the LTV was in the 60-80%bracket. However, we clarified with UB that the gift will be in the form of selling the house below market value rather than cash. This has led UB to say that the value for the LTV is the 300k figure rather than the 400k thus increasing our rate to 2.4% as our LTV would now be >80%.
I was surprised at this, especially seeing as UB will be sending out a valuer who will value the house at around 400k. Is this common practice or should I pursue this further?
Initially we were being quoted a 2 yr fixed rate of 2.25%. as the LTV was in the 60-80%bracket. However, we clarified with UB that the gift will be in the form of selling the house below market value rather than cash. This has led UB to say that the value for the LTV is the 300k figure rather than the 400k thus increasing our rate to 2.4% as our LTV would now be >80%.
I was surprised at this, especially seeing as UB will be sending out a valuer who will value the house at around 400k. Is this common practice or should I pursue this further?