I want to buy a property and let it out. To do so, I'll need a buy to let mortgage in the UK.
Let's say the property has been officially valued at £100,000. The bank says they will lend me 75% of the value of the property, so £75,000.
However, because this property is in demand, I think I'll have to pay £110,000 for it. I only have to pay this much because others will as well. I would argue that, because it's in demand, it is worth that amount, so I am not losing out by paying a little more. I would just be paying what it is actually worth.
But to do so, I still need the bank to lend me 75% of this value, £82,500. Will the bank lend me this, because that's 75% of the sale price or will they say "we'll lend you 75% of what a surveyor thinks, £75,000, and you need to come up with the other 25k plus any additional amount you have to pay to secure it"? i.e. 35k.