Buying a new build house

Tuckers_Luck

Hello, this is the first time I've written a forum thread, but I'm in need of some advice....

My husband and I have just sold our house and we have spotted a fantastic new build property that we really like and would be ideal for our future (starting a family, getting a dog, etc).

However, when I phoned up our mortgage provider, they told me that they would only loan us 70% of the value of a new build, whereas they would loan us 75% of a pre-owned house.

This leaves us in a dilemma, as the house is at the top end of our budget at 75% loan to value! :eek:

Does anyone know if this is common among mortgage lenders? As I am now thinking of phoning other companies, but if they're all going to say the same thing, I might as well save the money on my phone bill....

All advice is greatly appreciated.

figgles

It's fairly common, but I'm assuming you are going off the list price. Although the market seems to be picking up a bit, no harm in offering a lot less, I got a discount of over 20% off a new build recently, which was partly helped by the valuation from the mortgage lender coming in at lower than the list price anyway.

Do you no harm to offer a lower price initially and see what happens.

Tuckers_Luck

Thanks figgles. I went to the developer's office today. They don't seem to want to negotiate on the price, but have offered me an interest free loan of 10% of the value of the house over 10 years.

I'm going to have to speak to the mortgage people again now, but don't feel like it's a better deal - it's just that they're lending me the money interest free instead of the bank lending it to me... it would still be a monthly expense....

Any advice anyone?

happybroker

keep pushing on the reduction in price, get an agreement in principle from your lender and go in with this and a letter and ask for a formal response from some one who is in a position of authority....Strata homes have just reduced the price of homes in decent area of Wakefield by £30,000!!

Tuckers_Luck

I will - my mother-in-law works for the Halifax and she told me the ins and outs of taking a developer's loan (which includes them having their name on your title deeds!) - it's just another debt and if anything goes wrong and the house has to be sold for less than we paid for it, we're really in trouble - it's more risk for us and none for the developer. Why am I not surprised?

I am going to push for a reduction in the price.

Thanks for the encouragement, will keep you posted.