To buy or to make an offer???

Pal08

Hi all,

My partner and I are currently looking to move in together after several years of staying with our respective parents and saving frantically. Biding our time has meant that we have quite a respectable deposit of £20k....or at least we thought it was a decent sum until we started looking for mortgage deals!

Earlier this year (Jan/Feb) we spotted a small new build development (approx 15 houses built by Keepmoat Homes/Haslam) in an ideal location (DH6) for us both to commute to our jobs in the North East. The three story, three bedroom houses with single garages were asking £155k back then and would have been overstretching us somewhat so we decided to hang on and keep an eye on the development from a distance.

A few weeks ago we found that the 2 remaining houses on the site have been reduced to £115k so that the developers can get rid of them and move on (or so we were told by the sales rep)....(We have now reserved one at the cost of £100 to buy us some time to seek advice and arrange a mortgage. The rep told us that the other plot has been reserved by someone else today)

With our £20k deposit we are looking to get a mortgage for £95k which gives a loan to value of 82.6% (I think?!). However, from the research we've done it seems that the better mortgage deals are mainly offered to those with an LTV of 75% or below.

The sales rep is pressuring us to complete asap (using the tactics that "there are lots of others interested in this plot with it being the last one") but we'd really like to hold out and hopefully benefit from the lower rates expected on 1st Dec which is just before out 4 week reservation period expires.

So we have a couple of queries that we would appreciate your views on....

1) With the value of the property having already being reduced recently (by 40k) is it reasonable to ask for a further discount to get closer to an LTV 75%?

2) Should we respond to the reps pressure by going full steam ahead and getting an agreement in principle at todays rates?....If so, can we change the deal in response to the lowering of interest rates before signing on the dotted line to accept the initial deal we receive?

3) Alternatively, are we better off holding out further and renting for 6-12 months at the risk of losing this house which on the surface seems like a good deal as our first home?!

Any advice or guidance would be greatly received as we're really not sure which way to go with this (the rep wants an answer on Monday morning!)

Best wishes,

Pal08

hethmar

Well it does sound like a good price I guess. Have you really looked at all the mortgage options available as £20k on a £115k purchase would seem pretty reasonable. Have a look at Nationwides site.

ad9898_3

I wouldn't buy at the moment, especially a new build, if you buy your 20k deposit will disappear within months, hold tight for at least another 12 months.

hethmar

But £40k has already been knocked off the price.

ad9898_3

hethmar wrote: »

But £40k has already been knocked off the price.

Fair point, however who said they were worth the original price they were up for?, regardless 40k is a tidy sum to save although if you can save more, why not

lincroft1710

If there are "lots of interested parties", they are hardly likely to offer a discount, and if they did would show the rep as having been less than honest about all those people queuing up to buy it.

Lanz81

I'm kind of in hhe same boat (see my post to buy ot not to buy) got 15k knocked off a new build and they are saying they need the deposit 2moz and i am finding it so hard to make a decision.

Pal08

Thank you for all your help and suggestions.

We are still very undecided on what to do. With the 4 week reservation period coming to an end on the 4 Dec, and increasing pressure from the rep, its not looking likely that we are going to get a better rate until 1st Dec. (leaving us 3 days to get sorted with a better "???possible mortgage deal???" deal).

And as mentioned above the 20k deposit will more than likely get swallowed up in the matter of months. (however, if we don't take the risk someone else will and will probably benefit in the long run once this has all blown over.

We are looking at it for long term so I guess it would just be a case of riding out the storm and keeping up with the payments.???

Pal08

ad9898 wrote: »

Fair point, however who said they were worth the original price they were up for?, regardless 40k is a tidy sum to save although if you can save more, why not

Very true, but we have nothing to compare it to price wise as they are new builds. The only real comparisons are that they have sold the rest of them earlier in the year for around the £150k mark????