How to deal with a down valuation on a property you are buying 
With property prices being all over the place now, with buyers entering into bidding wars for properties 
and offering over the asking price properties are being down valued more than usual. Although a down 
valuation may feel like your purchase is dead in the water, but it isnt always doom and gloom as there 
are many things you can do in this situation. Lenders base their mortgage lending on the lower of the 
purchase price or house valuation. 
You have many options available to you in this situation. Here’s an example to help you understand: 
You agree to purchase a property for £200,000 using a 10% deposit (£20,000). 
You apply for a 90% mortgage of £180,000. 
But the lender valuers the property at £180,000, not £200,000. 
So now your 90% mortgage is £162,000 not the original £180,000 you applied for. 
Here are your options: 
1. Go back to the estate agent and seller of the property and renegotiate the purchase price to 
reflect the mortgage valuation. If the seller is willing to renegotiate with you this could be a plus, 
as you will now buy the property you have fallen in love with for less than previously agreed. 
2. If the seller cannot drop the price all the way to £180,000 you could meet in the middle at 
£190,000 and you would need to make up the £10,000 difference with an increased deposit. This 
would take your deposit to £28,000. 
3. If you have the funds, and you are happy to do so you could still pay the full £200,000 purchase 
price by increasing your deposit further to £38,000 and using the maximum mortgage of 
4. If you don’t have the funds to increase your deposit to bridge the gap and the seller still wants the 
full original purchase price, you could reapply with another lender. Another lender may use a 
different valuer who takes a more favourable view on the property price granting you the full value 
of £200,000 and the mortgage of £180,000. 
5. If you have tried all of the above, the seller won’t renegotiate, you don’t have the funds to bridge 
the price gap and numerous valuers have valued the property lower than agreed, you may need 
to pull out of the deal and start looking again. 
As always a good mortgage broker will help coach you through each step of the process and help you 
decide with route to take. In times like these a good mortgage broker will really pay dividends for you. 
If you would like us to help you with your next purchase and coach you through all of this, please don’t 
hesitate to contact us! 
01482 205084 
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