Ignorant mortgage question

[camshafted]

Hello,

I'm an FTB and going through a mortgage for the first time and I've got a very ignorant question, but I can't seem to find an answer!

I have a mortgage agreed on a home and I've just had the valuation and survey back. The valuation matches the house price, but the survey has found a few things which need to be done. As a result, I am looking to renegotiate the price a bit.

If this is agreed and I get the house for less than the agreed mortgage, do I go back and reapply for a different mortgage or can I still get the same loan and use the cash in the figure to carry out the repairs?

E.g.
Bank agree to lend me £250k
I get £5k off the price

Do I:
Still get the £250k but now have £5k in cash to spend on the home
Now have to go to the bank, reapply, go through annoying paperwork

If anyone can help, thanks. If not, sorry for polluting the forum with nonsense!

[Sarnie]

If you renegotiate the purchase price then the lender will lend you x% of that figure as per the original application.

For example;

You agree to buy it for £250k and apply for a 90% mortgage of £225k to which the lender agrees to.

After the survey you renegotiate down to £245k.

The lender now will lend you 90% of £245k, as the purchase has been reduced, which equals = £220,500

[camshafted]

Thanks Sarnie.

The mortgage company have indicated that underwriters will have to reassess it if the price is lower.

This seemed strange, because if I can afford the hypothetical price, I can obviously afford a lower price!

Would it make more sense to stick to the initial agree price on the understanding the owner carries out the agreed work?

[Sarnie]

camshafted said:

Thanks Sarnie.

The mortgage company have indicated that underwriters will have to reassess it if the price is lower.

This seemed strange, because if I can afford the hypothetical price, I can obviously afford a lower price!

Would it make more sense to stick to the initial agree price on the understanding the owner carries out the agreed work?

It would be reassessed but if the borrowing is reducing then it should be agreed if it's already been agreed at a higher figure.

With regards to what you do next, it's hard to say without know the issues with the property, your position, the vendors position etc.......I'd probably want the money off to make sure the works done properly...

[camshafted]

Thank you very much for your help Sarnie.