LTV for a mortgage

[pcolbeck]

Our house has been valued by the banks valuer at X in present condition and at Y when the extension is completed. When we are setting up a mortgage do they use X or Y to calculate  the LTV ?

[Pancho]

A prudent bank would use X.

[Martin]

Nationwide will offer up to 85% of the new value after improvements (I know this doesn't answer your question). I assume you have already bought the house?

I presume they add a certain extra LTV premium on the basis that some borrowers might not build the extension and put it on the gee gees instead

[pcolbeck]

We have had the house for 10 years. X would mean the LTV was 65% and Y just under 50%. Makes a big difference to the interest rates you are offered if it is under 60%.

[pcolbeck]

Bank are going to see if they can do it on the current value but retain some of the increase until the work is completed at which point our LTV should be 50%. Fingers crossed.

[pcolbeck]

Result they are going to use the estimated valuation on completion for the purposes of the mortgage !