I am about to buy my first property. I spoke to a financial advisor today and I didn't get what he was saying. He mentioned something like one the main errors of first time buyers is that they think that the LTV is calculated taking into account the percentage of the total purchase, whereas in reality it's the percentage of the value of the property.
As an example:
- A person requires £135k to offer £160K for a property. So the deposit is £25k.
- The property value is £150k
- The LTV is calculated considering £150k instead of £160k.
I am certainly sure I got something really wrong, but hopefully someone can shed some light on this non-sense!