Can Abbey stop us transfering our mortgage to a new property?

Scott1_2

A change in circumstances has led to my partner and I looking for a new house. After searching the internet we couldnt find a house that ticked all the boxes. Then we looked at some new build properties and found the perfect house, the right area, walking distance of shops and pubs, parking for 2 cars, large rooms and a garden. After negotiating a discount on the purchase price and a quick conversation with the Abbey about the amount we can borrow we paid the reservation fee on the property.

This is where the problems start, we then went back to the Abbey to ask them to confirm everything will be ok and ran through the details of the property. We told them it is a new build and we would only have 10% deposit. Abbey said we cannot transfer our current mortgage because we will not have the deposit for a new build, they told us it has been changed to protect us from negative equity. I then asked for a redemption figure and they have told us it will be £5000.

We have since tried to negotiate a £5000 gift from the builders, which they may not give us since they have already offered a discount on the property. They cannot play with the purchase price to get us to the higher deposit so we can stick with the same mortgage as it will push us into 3% stamp duty.

Can the Abbey stop us from transfering given that the mortgage was sold as a portable product? If so can they hold us to the £5000?

Just a couple of points I have not mentioned, if we are able to stay with the Abbey the amount we need to borrow will increase but the LTV will remain the same as it was when the mortgage was taken out (90%). If we can change to another lender we will be able to increase the deposit to 15%.

Trying_to_be_good

Unfortunately, mortgages are only portable SUBJECT TO MEETING THE LENDER'S CURRENT LENDING CRITERIA - you don't meet their criteria for borrowing on a new build property, so can't port the mortgage unless you can increase the deposit/equity to whatever their minimum is (you say you could increase your deposit if you moved lender, why not with your current lender?).

nw_man

If it were me I would be giving the builder some severe grief.

They want to sell and you want to buy.

I am willing to stick my neck out and say they are more desperate for a sale than you are to buy !

Scott1_2

unfortunatly we fixed the mortgage last summer at the highest rate, which means our monthly payments are more than they would in the new property with a larger mortgage. We have enough available on a credit card to make up the extra 5% and they keep offering 3% APR interest on cash advances. I have no issues borrowing money this way as I will clear the credit card in 12 months. Unfortunatley the Abbey need a 20% deposit and my flexible freind will not streatch that far.

Lets hope that the builders say yes to the £5000 gift to get us out of the Abbey mortgage.

I find it strange that the government say more new properties are required to meet the future demands of the country. Is this the same government that part owns several banks that dont like new build properties because they loose too much money?

Lynn11

I personally would walk away if the builders are not going to budge, and would not use cashback on a credit card to fund a deposit - very high interest will be paid and you may find it a struggle with all the bills etc if you overstretch yourself on your credit card. Think carefully before you proceed.

Trying_to_be_good

Scott1 wrote: »

We have enough available on a credit card to make up the extra 5% and they keep offering 3% APR interest on cash advances.

Wow - if the card really is offering a cash advance at 3% APR then please let us know what it is. I would certainly be wanting to apply for one.

Please check really carefully, as it's more likley to be 3% per month or something similar.

Good luck with the negotiations with the builder.