Mortgage for a New Build

wslawson · 20 January 2008 at 10:06PM

Hi, I would be grateful if somebody could give me some advice regarding buying new builds. I have been to a new buld development and am interested in purchasing an apartment, the only problem is the apartments will not be built until July or August. The developer is offering pay £99 move in deposit scheme for first time buyers. If I go ahead and reserve a plot do i need to get in place just now a mortgage or can i wait till near the time the apartment will be ready, especially with interest rates possibly falling? Also do you need to get a valuation done on a new build flat? Finally and sorry for all the questions after 14 days of paying the deposit, contracts have to be swapped, does the mortgage need to be in place for then or as I asked ealier can it be near the move in time?

I thnak you in advance for your help and advice on the questions above.

Many Thanks
William

lucasmum · 20 January 2008 at 10:26PM

Hi, we are in the process of buying a new build(well, 35% of it as it is a shared ownership!). You will definately have to have a valuation done on it as the mortgage lenders won't look at your application until they have your money for the valuation. We have been told that we do not need to have a survey which does save a bit- the valuation cost us £280 with Halifax.
I wouldn't imagine they will do the valuation until the flat is built.
What you will probably need is a mortgage promise, basically a piece of paper from the mortgage lender saying how much they are willing to lend you taking into consideration your income and other comitments.
This will probably be enough for the developer to see that you will be able to get your mortgage and sign the contracts.
Hope this helps a bit- good luck x

phlash · 21 January 2008 at 2:06AM

Are you sure you want to buy a new build 2 bed flat at this point in time?

If you were to take the biggest gamble of your life, and you had the opportunity to do some solid research in order to improve your chances of winning, would you?

If your answer is yes, then you wouldn't be buying this property at this point in time.

If its no, then now you have the chance to change it to yes.

If its still no, then look up negative equity.

If its still no again, then I'm exhausting my time on a lost cause.

Jonbvn · 21 January 2008 at 8:20AM

You may struggle to get a mortgage above 75% LTV for a NB apt.

I would urge you to reconsider buying a NB apt at this time. Wait a while and get it much cheaper.

siowenson · 21 January 2008 at 10:44AM

Whats wrong with buying a new build just now? I bought a NB apt 2 yrs ago in east lothian scotland and ive put my deposit down on a NB 3 bed semi at the same site.

My apt value has increased by over 30k in those 2 yrs but the prices they are selling for are still inline with the NB being sold by the builders.

So what does it matter if its a NB or second hand?

Have i made a mistake buying another NB?
Its costing me 182000 and im puting down 20k deposit.

Conrad · 21 January 2008 at 1:14PM

Many lenders have stopped or severly restricted lending on new build - now why do think they would do this, wink wink.

Jonbvn · 21 January 2008 at 1:49PM

siowenson wrote: »

Whats wrong with buying a new build just now? I bought a NB apt 2 yrs ago in east lothian scotland and ive put my deposit down on a NB 3 bed semi at the same site.

I really wonder what planet you are from?;)

dunstonh · 21 January 2008 at 2:33PM

Whats wrong with buying a new build just now?

1 - Builder deposit scams
2 - Priced higher than true market value
3 - Appartments/flats first to suffer in any decline (so double whammy with new build apartments)
4 - Prices dropping so lenders cannot turn a blind eye to it any more
5 - Lenders now subject to FSAs TCF rules on responsible lending and consider these higher risk so they have a higher criteria.

jamesd · 21 January 2008 at 4:16PM

If you're really going ahead with this, do be sure that you're asking for a 30% discount from the builder beyond whatever they have already offered you. If they don't take it, leave them your contact details so they can get in touch with you if they change their mind. Give them a call a month later and ask how many units they still haven't sold and reminding them that you're potentially interested for a price that makes sense for you.

It's a buyer's market and it's getting even more so. Exploit it. But you can best do that by waiting.

Dan_Collins_2 · 21 January 2008 at 4:34PM

Hi William, well it is not a great time to buy a new build but then again I dont know the market in your area. The problem right now isthat when going back to remortgage a new build we are finding that the valuation is being done and having any insentives taken off. Also about 15% off of the original price do to a new build being more expensive. Halifax are currently very good at new builds but plenty of lenders are as long as its not a buy to let.

Def get the mortgage sorted though as if it turns out you cant after you have exchanged you will be in all sorts of trouble!

Mortgage for a New Build

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