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26 April 2009

85% rates on 90% mortagage - bargain or dodgy?

I and my fiance are just starting to look for a property to buy - we are both first time buyers. We saw a mortgage broker who said that some companies are offering mortgages that are 90% of the surveyers valuation, even if that means that the valuation is higher than the accepted offer. The company will then lend us the amount we require which could work out to be, say, 85% of the surveyors valuation, which could equate to 90% of the offer price or less thus allowing us as borrowers to access the lower rates of an 85% mortgage. The companies he quoted are high street banks and he assured us that this would be done with thier full knowledge and cooperation and that it would also be documented by the solicitor. This seems to be falling into the "if it seems to good to be true then in probably is!" category. Has anyone heard of this and/or taken part in such a scheme?

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