First Time Buyers!

porkiepine

Hi,

My fiance and I have found a lovely house and have had an offer of £105500 accepted. It is a part exchange property that is being sold by a developer and is an absolute bargain!

We have a deposit of £5250 (5%) and the developer is also giving 5%. So we need a 90% mortgage.

I would be grateful if you could give me some advice about lenders who would offer a 90% mortgage on this basis (i.e. with the vendor gifted deposit).

I would like a fixed rate, preferably for around 5 years as I don't want to risk increases in rates, especially in the current conditions! Any help greatly appreciated!

Thank you!

Toughluck

Do you have absolutely any adverse credit at all and any remaining loans or cerdit cards? What is your joint annual gross income if you are employed?

porkiepine

I have a graduate loan for a postgraduate course that I did. That has £21000 outstanding, that is £340 per month. My fiance has a loan with £950 outstanding and payments are £71 per month. We don't have any adverse credit but my fiance has credit cards of about £5500.

I earn £17000 (but have just got a new job where I will be earning slightly more, not sure how much yet.) and my fiance earns £16800 basic but gets 22% shift premium which makes his total £20500. He also gets overtime but I couldn't say for definite how much that would be EVERY month. So if you can count the shift premium we earn about £37500 jointly.

SunnySusie

Check out MSE's tips on getting free mortgage advice .

http://www.moneysavingexpert.com/mortgages/

Toughluck

If that loan shows on credit searches which I think it would. Nationwide do 95% and used to do 4.25x joint income. I think you'd be OK with them but not saying a definate though.

moneysavinmonkey

porkiepine wrote: »

Hi,

My fiance and I have found a lovely house and have had an offer of £105500 accepted. It is a part exchange property that is being sold by a developer and is an absolute bargain!

We have a deposit of £5250 (5%) and the developer is also giving 5%. So we need a 90% mortgage.

I would be grateful if you could give me some advice about lenders who would offer a 90% mortgage on this basis (i.e. with the vendor gifted deposit).

I presume you have additional funds on top of you £5250 to pay solicitors fees, survey fees, mortgage arrangement fee, moving costs etc.. budget at least £1.5k but to be honest with a 95% mortgage that could be the arrangement fee alone.

House prices are currently falling at a rate of at least 10% per year. If this continues then within 6 months time you will be in negative equity. Make sure you understand the implications of this if you decide to go ahead.

I would like a fixed rate, preferably for around 5 years as I don't want to risk increases in rates, especially in the current conditions! Any help greatly appreciated!

Thank you!

Bit confused how you have already made an offer- How can you know if you can afford the house until you have your mortgage in place? I hope you have not given any (non-refundable) deposit to the developer yet.

There are new rules about developer gifted deposits so you need to declare this to your solictor and your mortgage broker/bank. In all likelihood given the current climate they will then discount the cashback from the property valuation so effectively you are looking for a 95% mortgage - which is going to be expensive.

You are best to go see a fee-free all of market mortgage broker. See the sticky by Martin at the top of this forum.

porkiepine

I understand the implications of negative equity (I am training to be a solicitor). However, the house two doors up the straight which is literally exactly the same is on the market for £150000. The reason this is such a good deal is because it is a part exchange which a developer is selling.

We have had an offer accepted as we were originally going down a 10% e vendor gifted deposit route and we were offered a mortgage of £100000 with RBS. They then decided that they were not happy with the vendor gifted deposit and so we are now going back to them with our own deposit. I have been speaking to a broker who is very nice, but I do not believe that he is a whole of market broker and that is why I was seeking advice on here.

bubblesmoney

porkiepine wrote: »

I understand the implications of negative equity (I am training to be a solicitor). However, the house two doors up the straight which is literally exactly the same is on the market for £150000. The reason this is such a good deal is because it is a part exchange which a developer is selling.

We have had an offer accepted as we were originally going down a 10% e vendor gifted deposit route and we were offered a mortgage of £100000 with RBS. They then decided that they were not happy with the vendor gifted deposit and so we are now going back to them with our own deposit. I have been speaking to a broker who is very nice, but I do not believe that he is a whole of market broker and that is why I was seeking advice on here.

the house next door being on the market for 150k while u r buying for 105-110k is meaningless . what matters is what the true value of ur intended purchase is and not what the dreamer next door wants for his house. wanting a particular sale price for the house is different from the true selling price or even the true value. for example i just exchanged contracts and completed on a house yesterday for a 4b detached house with garden for 135k (6.5y old house with nhbc guarantee still available) and within 5mins walk from my property there are 10-13 similar properties being marketted at 169950 - 245000:eek: . all 4b detached similar plan, same builder same development, although i admit 2 -3 of them have bigger gardens and 1 has double garage, 3 have conservatories, a few have slightly bigger master bedroom. but i dont think any of them are worth 35k-110k more than i bought my house yesterday for 135k. dont think u have a bargain just because the nearby house is marketted at a higher price. even i think i might have overpaid by 5k probably even though other neighbouring similar houses are being marketted 35k - 110k more than my house. one house exactly the same as mine a minute or two from mine is being marketed at 179950.

i had viewed a few of the other houses as well before deciding on my offer. infact just now i contacted an EA through whom i had viewed another house less than 2 mins walk from mine for 199950, similar house but with small conservatory extra but owner occupied unlike my purchase which was vacant and available for quick purchase. i contacted the other EA because she was very helpful and approachable when i viewed some properties thru her. i wanted to give her honest feedback on valuations. at that time i had refused to make an offer on that house even though i liked the house, i had told her that owner was not realistic on valuation and i wouldnt bother wasting my time on making lower realistic offers as they would look ridiculous to that owner. when i told my purchase price i could literally hear the EA gasp at the other end of the line and she couldnt believe the valuation. i also told her that another similar house was most probably available for similar or slightly higher amount as per indication given to me by another EA.

so hope u realise that asking price and actual valuation are different and just because neighbour lives in cloud cuckoo land does not mean that ur (or even my purchase) intended purchase is a steal. property prices are high and it is high time they came to realistic levels

0james0

porkiepine wrote: »

Hi,

My fiance and I have found a lovely house and have had an offer of £105500 accepted. It is a part exchange property that is being sold by a developer and is an absolute bargain!

We have a deposit of £5250 (5%) and the developer is also giving 5%. So we need a 90% mortgage.

I would be grateful if you could give me some advice about lenders who would offer a 90% mortgage on this basis (i.e. with the vendor gifted deposit).

I would like a fixed rate, preferably for around 5 years as I don't want to risk increases in rates, especially in the current conditions! Any help greatly appreciated!

Thank you!

To actualy answer your original question, the 2 lenders I end up using for vendor gifted deposits are Halifax or BM Solutions. Both are completely fine with it.

Nationwide do not accept vendor gifted deposits, although I believe they may still be doing 95% mortgages but only direct in branch.

Based on what you've said I'd say the Halifax would be your best bet. Because they would treat it as if you had a 10% deposit it also means you avoid paying a Higher Lending Charge (saving you about £1500)

Last time I looked Halifax had slightly cheaper rates too.

Sounds like you've got yourself a bargain! Ignore the pessimists you'll find on here, you sound like you know enough about what you are doing to know the pitfalls of buying.

porkiepine

0james0 wrote: »

To actualy answer your original question, the 2 lenders I end up using for vendor gifted deposits are Halifax or BM Solutions. Both are completely fine with it.

Nationwide do not accept vendor gifted deposits, although I believe they may still be doing 95% mortgages but only direct in branch.

Based on what you've said I'd say the Halifax would be your best bet. Because they would treat it as if you had a 10% deposit it also means you avoid paying a Higher Lending Charge (saving you about £1500)

Last time I looked Halifax had slightly cheaper rates too.

Sounds like you've got yourself a bargain! Ignore the pessimists you'll find on here, you sound like you know enough about what you are doing to know the pitfalls of buying.

Thank you for giving me a decent answer! Why does everyone on here assume that I am a complete idiot?! It is not helpful.

Thank you very much! x

_Andy_

porkiepine wrote: »

Thank you for giving me a decent answer! Why does everyone on here assume that I am a complete idiot?! It is not helpful.

Thank you very much! x

Can you direct me to the post which states or implied that you are?