Question re valuation of new build and mortgage

[SEAN LTL]

Hi all,

Sorry if this has been asked before. Looking at securing new mortgage for new build in rural area. Have purchased the site for 40k and have costings document for build @350k. We are second time buyer/mortgage applicants so we can only get 80%. It was my understanding that as a consequence we could borrow 80% of 390k which is 312k. This would be within our 3.5 times salaries, however, a valuer is telling us that on completion of our new build the value he would put is maximum 350k which would mean borrowing 280k (as in 80%). Is this correct or should I seek a second opinion from another valuation.

Thanks

 

[Monbretia]

You will be able to borrow based on what the bank's approved valuer says it is worth on completion so make sure if you're getting a second opinion it's from one on the bank's panel

The sum of the site and build costs does not always equal the finished value, not that uncommon to have them differ.

 

[SEAN LTL]

You will be able to borrow based on what the bank's approved valuer says it is worth on completion so make sure if you're getting a second opinion it's from one on the bank's panel

The sum of the site and build costs does not always equal the finished value, not that uncommon to have them differ.

Thanks for the reply @Monbretia! One other thing then, can we use the value of the site as part of the 20% deposit?

 

[Monbretia]

That I don't know, used to be the case that it could be used towards the deposit percentage but don't know present situation with banks on this.