Loan to Value Definition

[Ciara Copeland]

Hello,

I'm wondering if somebody can advise as I am getting conflicting answers from the banks. Is the value in the 'LTV' calculation based on the market value of the property or on the purchase price?

If, for example I was to purchase a property from a family member at a 10% discount to market value would this be considered at part of the 20% deposit required or would I still need a 20% deposit based on the purchase price?

My understanding was that the CBI requirements were to have a 20% buffer for property price decreases etc.

Thank you in advance

 

[rob oyle]

The LTV for CBI purposes is the purchase price... you need 20% of the purchase price as a deposit, for example.

 

[Ciara Copeland]

Thank you Rob.

I just got off the phone from another bank who said the difference between purchase price and market value would be treated as a gift.