Offer the vendor the lower valuation then! If they don't want to sell at that price, more fool them. Walk away and find something else.it was asking advice on how to get around the banks valuation of the place to make sure we could secure the property - at no point has money come into this from my side, everyone else decided that money came into this. glad i'm being blamed for that too
Mortgage/Valuation issue
- Thread starter toshj
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Thats all fine and well. The issue still remains that the property is overpriced, going by the valuation that has been performed by the banks surveyors.
yeah i completely understand, and there's no way we'll be paying our initially accepted offer price, its entirely up to him to decide to lower his expectations or pull out of the sale. he'd then have to bank on a cash buyer, or a different lender valuing it at a higher amount - both are unlikley in this market.
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Does his mum understand that if you do a runner or want to move out, or something happens that he/ her are entirely responsible for the whole mortgage? With his deposit, he could almost buy a small place and have a small and manageable mortgage, and not be geared up to the eyeballs.
What is wrong with renting anyway? It's not dirty or shameful, all he is doing in your proposed deal is renting from the bank and has all the liabilities/ responsibilities of a homeowner (Worst of both worlds). I earn well over double what your mate does, and have no problem with renting, nor any desire to buy at the moment.
I think you need to assert yourself a bit more and lay out just how serious the implications of this purchase are for your mate. Really this could cripple him for years and years, and he won't thank you or his family for it.
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I don't want you to take offence, I just want you to take notice. How many people have told you this is a bad idea? Please listen to us, try to re-examine the matter from a fresh perspective. We are simply trying to stop you making a horrible mistake, nothing more than that, honestly.
Something that I'm surprised people haven't pointed out already.
The whole deal is based upon your friend's mother bailing him out if things don't work out financially. Have you considered that a few years down the line he:
a) might fall out with his mother = bad for you
b) if this go financially awry, his mother decides to bail out and not support him or you = bad for you
c) His mother dies, your friend dies or whatever and can't be part of the mortgage anymore? (morbid but things happen)
To be honest, having her "word" means absolutely nothing when one has to face up to thousands and thousands of pounds to pay. Imagine things go wrong (as they are likely to go at somepoint in life - we all go through rough patches) and his mother has to support her son in the tune of a lot of money, she will think the following "I can either pay this guy a truckload of money to support my son's 1-room accommodation in London or I can tell him to shove it, pay nothing and get my son to rent a room somewhere else for exactly the same amount of money he is paying right now, oh in the latter case I'll be stepping on my word..what to do, what to do?".
I think your friend's mother is taking you for a ride. The mortgage is effectively on you to support as your friend doesn't have any financial abilities to help if things go bad and his mother only gives her "word, promise, oath" or whatever you wanna call it.
All things aside that the others have pointed out which make your plan a horrible idea, I think you should also contemplate that too. When money comes between friends things can go bad very-very quickly.
The whole deal is based upon your friend's mother bailing him out if things don't work out financially. Have you considered that a few years down the line he:
a) might fall out with his mother = bad for you
b) if this go financially awry, his mother decides to bail out and not support him or you = bad for you
c) His mother dies, your friend dies or whatever and can't be part of the mortgage anymore? (morbid but things happen)
To be honest, having her "word" means absolutely nothing when one has to face up to thousands and thousands of pounds to pay. Imagine things go wrong (as they are likely to go at somepoint in life - we all go through rough patches) and his mother has to support her son in the tune of a lot of money, she will think the following "I can either pay this guy a truckload of money to support my son's 1-room accommodation in London or I can tell him to shove it, pay nothing and get my son to rent a room somewhere else for exactly the same amount of money he is paying right now, oh in the latter case I'll be stepping on my word..what to do, what to do?".
I think your friend's mother is taking you for a ride. The mortgage is effectively on you to support as your friend doesn't have any financial abilities to help if things go bad and his mother only gives her "word, promise, oath" or whatever you wanna call it.
All things aside that the others have pointed out which make your plan a horrible idea, I think you should also contemplate that too. When money comes between friends things can go bad very-very quickly.
If the property is under valuated you are offering too much money for it.
So if interest rates go up and you can't afford it anymore you have to sell, you could end up with a remaining debt of 80k if it has to be sold at auction for a lot less than 540k.
CAn you not get a different real estate gagent make a valuation and see what he/she comes up with?
So if interest rates go up and you can't afford it anymore you have to sell, you could end up with a remaining debt of 80k if it has to be sold at auction for a lot less than 540k.
CAn you not get a different real estate gagent make a valuation and see what he/she comes up with?
i am in the process of buying a property to rent out
it was valued at the amount im paying for it
if it were valued at less i wouldnt be working out how to try to get them to valuer it higher,
i would be going back to the seller and offering less for it
most people we've spoken to have actually been pretty supportive. spoken to an ifa, an accountant (regarding my own financial situation) and if the bank are happy to lend to us then i thought that must say something. my mate's cousin has 20 years experience within a commercial bank (our mortgage advisor is a family friend), and his mother is one of the most fearsomely intelligent people i know - all of these people seem to think its not a bad idea.
trust me, i've taken into account everything that's been said on this thread and haven't just mindlessly argued my case. i actually thought that property was quite well priced - a 1,400 sq ft is a pretty big flat for zone 1 in central london, and if you were to plonk the property in the area i live now (old street) it would be worth a hell of a lot more than its asking price - a one bed conversion in the building in which i'm renting goes for £450,000.
all in all, i doubt the vendor will want to take a hit of £75,000 on this place, so i imagine this thread will come to a rather boring anticlimax.
So any linkage to the actual property ?
lol, not yet i'm afraid. if it falls though or we end up getting it, i'll post some photos. like i said, main selling point for me was the table tennis table and pool table! if my job failed i'd just work my way towards being a top-earning professional table tennis player!
No offence but a lot of banks thought over-leveraging people was a good idea back in 2007, and look what happened.
What do these supportive people say when you pose the question about interest rates hitting even a still historically tiny 2%? Also as I said, don't forget mortgage rates are likely to go up anyway as the SLS ends. Have you considered that?
Whilst you say you might not get this one, I think a lot of people here would hate to see you make the same mistake on another similarly priced property that does get you an accepted mortgage.
So my understanding is this would be on the mortgage agreement, and she is liable for the entire mortgage in effect.
i completely understand the point you're getting at. most of the people we've consulted are fully aware of:
a) my financial situation
b) the integrety of my mate's mum
its very difficult to describe what type of person she is, but she would never leave her son in the **** and has significant funds to call upon should anything go awry
as mentioned in previous posts, i've taken on board quite a lot and you posts/suggestions certainly seem to be the most constructive. i've already drop a few qutestions through to our mortgage advisor in line with the SLS point and othes. thanks for the advice - really aprpeciated
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Well not quite...
The banks situation is in fact partly caused by the ledning and securitisation stregies employed by the UK banks. Northern Rock being one example and the notion of mortgages like self-cert and borrowing 115% or even 124% of the current valuation of a property - it was madness in the UK as it was abroad which did contribute (but I do accept did not by itself cause) the fianncial crisis
The banks situation is in fact partly caused by the ledning and securitisation stregies employed by the UK banks. Northern Rock being one example and the notion of mortgages like self-cert and borrowing 115% or even 124% of the current valuation of a property - it was madness in the UK as it was abroad which did contribute (but I do accept did not by itself cause) the fianncial crisis
