Buying a house - first steps



God the article makes it sound like a financial crash is incoming. I might not buy anywhere again for a while :neutral_face:


I would say that paying more for a house than a financial institution is prepared to value it at is a complete no-no.


This actually happened to my friend who’s selling his flat. The buyers asked to drop the price by £25k! In the end he agreed to drop the price by 25% of £25k to make the sale go through.

So I guess it depends on how eager they are to move. Maybe banks are starting to be more cautious with their mortgage lending?


I’ve been reading articles like that for the last few years to be fair, but it does feel like there’s something a’brewing.


I’m a bit worried about the Brexit effect tbh


It’s alright, it’ll only take 50 or so years to sort out.


Yeah those trustworthy banks, they only have you at heart.

Wouldn’t treat this as a true valuation, could just be a bank trying not to lend.


Eh? It’s got nothing to do with their soft hearts. If the bank doesn’t think your house can be sold for what you paid for it if you default on your mortgage then they won’t lend you that much. And if that’s your situation then you’re paying well over the odds.


Or if the market is getting tough and they don’t want to lend as much they come in below the price agreed to encourage you to go to another vendor.




Think I’ve got buyers remorse


If they don’t want to lend then they don’t have to. It’s really easy for them. They don’t need to piss about.


Yeah but banks really hate saying no, then getting a rep for being non-lenders, then people would stop applying.

It’s pretty basic cynical bank shithousery.

(Not saying it’s the case every time, but if you think banks don’t make decisions on this stuff then you are giving them far too much credit)


Obviously don’t know your situation, but I have felt like this several times since moving in. It always goes away. I think it’s inevitable when you spend a massive amount of money on something to wonder if you made the right choice. But I would just remind myself of the good things and how I had looked for months and this was very clearly the best place I could afford.

And if it doesn’t go away? You don’t have to stay there forever.


hopefully it will be ok in the long run, I’m still not fully moved in and only stayed there a couple of nights, just my nightmare scenario, the people in the flat underneath are really loud, seem to be playing shoot em up computer games through a subwoofer and I can even make out conversation, hopefully they are just used to having an empty flat above them and once I’m in there properly they will reign it in a bit, but its going to make me self conscious about playing musical instruments and listening to music and stuff. also think I rushed into it, only decided to get a place because I thought time was running out for me to get a mortgage as I thought id need like 33 years but it turned out I could do it comfortably with 26 years, so probably should have waited until post-brexit, also think I probably over paid for it so if a crash comes and I hate it I will be trapped. still early days, and I do like the flat, probably just in a bad frame of mind after smashing my tv putting together an ikea wardrobe


Aye, but no, but.

You’ll seldom get many recommendations to buy anything for more than the generally accepted market value. But… it completely and utterly depends on the individual circumstances. If the buyer has the money and considers the expenditure to be worth it, then who’s in a position to contradict that? Also, lenders won’t necessarily be up to speed with ‘hotter’ areas where their assessment doesn’t match the reality (which is, to a degree, a subjective judgement, but a reality nonetheless).

Sure, over-exposing yourself to risk is likely to be a mug’s game. But a bank’s assessment of what they’re prepared to lend on a place will never be the sole measure of risk. And that can work both ways.

Just thinking back a little… Northern Rock used to offer something daft like ‘120% mortgages’, where, in truth it was a 100% mortgage and a secured loan on top. What could possibly go wrong??? More recently, the supposed help of shared ownership schemes has ended up with people being screwed. Banks may or may not be taking overly cautious positions right now in certain circumstances. We don’t know. But there’s no way they’re getting it bang on every time. (And even if they were, like I say, that in itself wouldn’t be the sole measure of what a buyer ought to necessarily take as a reasonable valuation).

E.g. ...

We paid 13.5% more than the survey valuation/mortgage ceiling, because the place we sold left us with funds to do so (we basically sold it for what we’d bought it for a decade earlier so didn’t really make anything on the place in terms of appreciation, more that we’d just built up enough equity over time). But it’s low risk because of (relatively) secure employment, the LTV, and the intention to be here in the long term.


Yeah all good points, but unless this hits me every single time then I’m walking away from any purchase where the bank won’t even accept that my house is worth what I’m paying for it.

There is literally no better time to walk away from a big mistake than this point of the process.


This is a well-documeted phenomenon. It’s probably even documented in this thread. After you first move in, every bad thing about where you’ve moved to manifests itself and you start to feel bad. Most of these things you will get used to and they will pass. If they don’t, then you’re still now “in the game”, and you can move again if you feel like that’s what you want. Try to stay chilled, I would bank that you’ll feel better in a few months even if nothing changes.


100% this. I was a wreck when we bought.

Had we overpaid?
All the work that needed doing etc


For sure you shouldn’t feel railroaded. Scope the full picture, weigh it all up, and of the bank’s saying ‘woah’, that’s a big (although not necessarily definitive) hint.