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Lender wants 20% deposit because its a new build - help!!
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VeronicaElectronica
Posts: 54 Forumite
Hi all,
I've had offer accepted on a fantastic flat (significantly below asking), i have 10% deposit and can afford the monthly payments, brilliant credit score, no issues with anything.
Found out today because its a brand new build the lender (Halifax) wants a 20% deposit!!! i cannot afford it, no matter how hard i try! I can up my deposit about 3k, and thats it. So my only option is to re-offer to the seller but at a drastically lower amount.
My mortgage advisor has done a lot of running around to try and sort something out, but so far nothing.
So i post on here for any suggestions/hints/help please?
I've had offer accepted on a fantastic flat (significantly below asking), i have 10% deposit and can afford the monthly payments, brilliant credit score, no issues with anything.
Found out today because its a brand new build the lender (Halifax) wants a 20% deposit!!! i cannot afford it, no matter how hard i try! I can up my deposit about 3k, and thats it. So my only option is to re-offer to the seller but at a drastically lower amount.
My mortgage advisor has done a lot of running around to try and sort something out, but so far nothing.
So i post on here for any suggestions/hints/help please?
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Comments
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NB flat? I am surprised they only need a 20% deposit.
NB flats are likely to drop in price massively. Wait and buy in a few months/years.In case you hadn't already worked it out - the entire global financial system is predicated on the assumption that you're an idiot:cool:0 -
Negotiate, negotiate, negotiate
If that does not work - walk away - in fact run!0 -
Probably a blessing in disguise - new build flat at 90% LTV = very rapid negative equity.0
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A lot of builders (in our area at least) are stopping building flats and smaller houses as the buy-to-letters who were buying them aren't any more, they are going for the larger houses instead and re-planning developments.
Keep saving and hold out, the prices of flats wont be going up any time soon, you may even be able to pick one up off a buy-to-letter cheaper anyway as they will be trying to offload. LOTS of flats for sale and rent around here, there are bargains to be had.0 -
Thanks for these replies, this particular flat is quite a unique situation in that i wouldnt be in negative equity with it due to extremely low purchase price (long story), but of course that doesnt matter to the lender does it.
All i can do now is say "this is my deposit which means X purchase price, take it or leave it" - and its a real shame if i lose it, but thats life.
There are quite a few flats on the market where i live, but sadly nothing that i have fallen in love with....nothing much has come on new, or sold. So i'll see what happens and keep watching for anything new, or mayb even rent and save. What a ridiculous situation!0 -
I expect to be flamed for this but here goes anyway...
Some builders will loan you 10-20% of the property value interest/payment free for 10 years. Only a few lenders allow this money to be included in your deposit, I know Abbey is definitely one. The builders often insist on you using their own broker too if you go for this type of deal. I looked at lots of new builds and Bloor and Wimpey both had schemes like this.0 -
danielanthony - thanks for the post but unfortunately i cant go down this route as the developer went bust and receivers are handling the sale, thus the cheap purchase price0
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Two swear words in one post. "new build" and "flat". Its no wonder you are being asked for a bigger deposit.
New builds typically lose 15% the minute you move into them. Flats lose value even quicker and by greater margins and in a falling market, they go down quicker than houses. Flats also tend to be considerably more overpriced by builders and have been subject to valuation fraud on a greater scale.
In a rising market the lenders tend not to be so concerned as you can quickly cover the drop. However, in a falling market, if your deposit is small, you will immediately find yourself in negative equity. So, they ask for a greater deposit.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
You're not based in Devon are you Veronica?0
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personal loan for the difference?0
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