Halifax LTV 95% at 7.49%

emz121

Hi ,

I am currently in the early stages of buying a new build flat for £80,000 with a cash back of 10% so my mortgage would be £72,000 .

Halifax is the only lender that will touch a new build flat at 90% ltv but it comes with a price of course interest rate of 7.49% fixed 5years.

but if i was so put 15% down they would give me an interest rate of 6.99% for 3years.

Im in two minds what to do , the builder of the flat i am buying has also agreed to pay the difference in the two interest rates (as i cannot afford to put down the extra £4)but only for 3years not the full 5years.

I am a first time buyer and in need of some advice on what to do.

thanks

nickmack

emz121 wrote: »

I am a first time buyer and in need of some advice on what to do.

I'd be inclined to wait until you have a larger deposit. Fixing at 7.49% or even 6.99% is a bit high, this would be true even before the recent interest cuts.

Do you have to buy this flat or could you wait and save a bit more? You'd get a wider choice of deals at better rates.

emz121

I dont need to buy the flat i think its just the fact i want it and im thinking investment more then anything , because in 5years time i will be able to sell the flat for alot more. I mean i am buying the flat at a bargin price. But i dont want to go ahead with the 5years fixed rate at 7.49% and regret it later on down the line.

thanks

scottburke

nickmack wrote: »

I'd be inclined to wait until you have a larger deposit. Fixing at 7.49% or even 6.99% is a bit high, this would be true even before the recent interest cuts.

Do you have to buy this flat or could you wait and save a bit more? You'd get a wider choice of deals at better rates.

would your advice be the same for me and my wife??

i m looking at buying a house- house up for 250k but they ve agreed to lower sale price down to 240k. then do us a vendor gifted deposit for 5% (12k) then we put 5% (12k) down = 24k. meaning we ve got a 10%deposit towards the house with a 90%LTV mortgage. but as we are doing a vendor gifted deposit, the only bank that will deal with VGD is the halifax. and there only offering us a 5 year deal at 7.09% interest rate. is this rate high??

_Andy_

Given their awful performance, what makes you think a new build flat represents a good investment?

nickmack

emz121 wrote: »

I dont need to buy the flat i think its just the fact i want it and im thinking investment more then anything , because in 5years time i will be able to sell the flat for alot more. I mean i am buying the flat at a bargin price. But i dont want to go ahead with the 5years fixed rate at 7.49% and regret it later on down the line.

Remember prices are dropping at the moment and look like they will continue to do so for a while. It could well be you can make a profit in 5 years time, but don't rely on it.

What happens if you need to sell in the next few years? At 90% LTV and the current price falls, it wouldn't be long before you'd be close to or even over 100%.

Others might have a different opinion, but at the moment, as Duncan Bannatyne would say 'It's not an investment for me'

emz121

i know the market is really bad at the moment but i am hoping 5-7 years time that it will pick up again because to be quite honest it cant really get any worse can it. i am not looking to move for a while so i can sit on the property until the market picks up. i know the value of a property is only what a person is willing to pay for it but i have knocked 20k off the asking price after months of negotiation. so thats why i think it would be a good investment for me..

beecher

emz121 wrote: »

I dont need to buy the flat i think its just the fact i want it and im thinking investment more then anything , because in 5years time i will be able to sell the flat for alot more. I mean i am buying the flat at a bargin price. But i dont want to go ahead with the 5years fixed rate at 7.49% and regret it later on down the line.

thanks

Now is certainly not the time to be buying a new build flat as an investment. Your chances of selling the flat in 5 years time for 'a lot more' are not good. I think it is a terrible idea - save up a decent deposit and you'll be able to get a lower rate rate too.

emz121

i will definitely re think , and maybe save a decent deposit so i can get a lower rate and maybe not buy a new build.

thank you

Ian_Griffiths_Halifax

The Halifax are taking all your profit from you with their extortionate interest rates. Don't touch them and don't touch a new build flat, expecially with only a 15% reduction in price.

The Halifax wouldn't allow you to use the full 15% reduction (Vendor paid deposit) anyway. They'd only allow 5% and so you would still need to find a minimum 5% to get a mortgage off them or 10% to get the 85% LTV deal you are wanting.

emz121

yeh i think i definitely need to re think my options and save a decent deposit and not buy a new build.

its just hard to save that much deposit. its going to take me forever...

thanks