It doesnt include your deposit.
House is 100k(for example) - bank will give you 95k and you give them 5k deposit.
You want to bid 120k - you need 25k cash - 5k deposit and 20k which is over home report value(the max the bank will mortgage for).
Does that make a bit more sense? I used 100k as an example cos its late in the week and my brain is too tired for maths |