High LTV mortgages for new builds

jurezob

Hi All,

It's my 1st post so please be gentle. We have recently had another addition to our family and have outgrown our current house. We have seen and reserved a new build property and we are lucky that they are doing part exchange on our propety. At the time of reservation we had reserved a mortgage product with the nationwide(our existing lender).
When valutions of our house were complete we needed to borrow slightly more as our home isn't worth as much as we had thought but sadly the product we had reserved had been withdrawn.
We really want this house and intend to stay there for several years but are finding it hard to get an affordable mortgage. Thankfully, there is little interest in the properties we are looking at so the builder is not pushing us to do anything and we would not sign missives anyway until everything is in place. We would rather walk away.
I am aware that the natiowide have reintroduced mortgages for LTV's up to 95% but to be honest the fixed rates are not affordable. There is a possible tracker for 2 years(+3.49% on BoE) but obviously a bit concerned about affordability if rates were to increase to much during this time.

My questions are will more lenders bring out affordable rates? Should we wait a bit longer and see what happens in the new year or will it be better to secure the tracker now if it is available to us? Does anyone have any idea if/when interest rates will start to rise? Should we take the gamble? Help!

Thanks

Cannon_Fodder

jurezob wrote: »

but obviously a bit concerned about affordability if rates were to increase to much during this time.

You are right to be concerned about affordability.

If you are having trouble affording a mortgage with base rates at an historic low - albeit some better deals may filter through in a few weeks - then future rates are going to be a real hardship.

Maybe not in 2009, but probably at some point during 2010 - just as your 2-yr fixed rate expires...

Push the builder harder on price, if you love that house. Stretch for a bigger deposit, which will improve the deals available. There will probably be leftover stock in the new year, of new builds, with some "pre-spring deals" to generate interest.

You have had the addition?, so presumably are surviving in the small house...would a few more months be impossible?

The house price crash will last another 6 months, at least, probably 12. Barclays CEO said another 15% to come off prices in 2009 - you would be in immediate Negative Equity which would affect your re-mortgage...

"Every pound less that you borrow, will be two pounds LESS to repay, and three pounds LESS to earn."

Good luck.

silvercar

You need to renegotiate.

It is unbelievable that your house has dropped in value but the one you are buying has not. If both have dropped by the same percentage then the difference that you need to find will be lower. In all probablility the new build will have dropped by more.

"There is little interest in the property you are looking at and the builder isn't pudhing you". Clearly you are overpaying. Tell the builder the price you need to do the deal.

beecher

Have you sold your existing house? I'd be considering looking to sell and then rent until you build up a high enough deposit.