New build flat - deposit situation

Gemma_B_2

HI

I have just learnt that I require a 20% deposit in order to get a decent interest rate on a new build flat that I really had my heart set on. I've got 15% deposit, but with this I'd be looking at a rate of about 6.99% which I really cannot afford/justify

I was just wondering what anybody thinks of the chances of lenders offering a mortgage product on new build flats with a 15% deposit at a more competitive rate; say 5.99% or under?

The flat I had my eye on is lovely, a brilliant price in a great area, I dont want it to slip away!

Any advice will be warmly welcomed... do you think its worth keeping an eye on rates and speaking to brokers to see if anything new comes up?

Many thanks (p.s. I'm a 1st time buyer)

HelpWhereIcan

Gemma_B wrote: »

I was just wondering what anybody thinks of the chances of lenders offering a mortgage product on new build flats with a 15% deposit at a more competitive rate; say 5.99% or under?

The honest answer I'm afraid is absolutely zero unless you find a flat with a developer that offers an approved homebuy equity share scheme, but even that depends.

Gemma_B wrote: »

Any advice will be warmly welcomed... do you think its worth keeping an eye on rates and speaking to brokers to see if anything new comes up?

Many thanks (p.s. I'm a 1st time buyer)

I would always say that it is worth keeping your finger on the pulse and a broker can help you do that.

I would suggest that it would pay to save as much as possible at the same time as things are not that likely to change for new build in the forseeable (but never say never)

Good Luck

Gemma_B_2

Apparently Notts BS withdrew a product just last Friday that was offering better rates for new build flats with 15% deposit... not actually sure what the rate was though...

Thanks for your help, I should probably cut my losses and find a different place, I just loved it so much

acs202

I know this doesn't help your actual question but I just wanted to give you the same advice that my dad gave me and I ignored.

It may be the flat of your dreams now but you will soon find your circumstances change and you want a house with more space etc. We have been in our new build flat for 2 years. It truly is a lovely place to live but it has almost ruined us financially.

The 15% desposit you have is likely to include a builder contribution. We also had the same. Now our flat is worth much less our deposit is non-existent. We now cannot move and resent living in a flat.

Take some serious thought and make sure the flat covers everything including enough parking (1 allocated space isn't enough for us) and SPACE - there is nowhere near enough in a flat!

If I could go back I would have saved up a deposit for a nice house instead. I know that I if I were you 2 years ago I probably wouldn't listen to the likes of me as I was so set on the flat but I just wanted to help someone else from making the same mistakes.

Also make sure if you do get it that the builders do their snagging properly. They are thieving money grabbing whatsits and will do anything to save a few bob!

Anyway best of luck!

Adam:j

Pint_Glass

Sorry for hijacking your thread, but this seems similar enough to join on.

My partner and myself have been into Halifax for an AIP this morning, and had a bit of a shock as we were told that as we are FTB and looking at a new build house we have to have a 20% deposit, and this is pretty much sandard with every lender now. Is this the case, or are we being taken for a ride?

We had been working on having 15% including the builder's 5% by the time we would need to part with the cash, it goes without saying it does put a small dampner on things.

dunstonh

Is this the case, or are we being taken for a ride?

Some are more than 20%. Its quite normal and to be expected.

In a falling market, flats and new builds tend to fall further than most. New builds tend to be more expensive than a comparable older house and tend to lose around 15% overnight. Partly as the builders keep the price higher on one hand and then try to give incentives on the other.

brit1234

Pint_Glass wrote: »

My partner and myself have been into Halifax for an AIP this morning, and had a bit of a shock as we were told that as we are FTB and looking at a new build house we have to have a 20% deposit, and this is pretty much sandard with every lender now. Is this the case, or are we being taken for a ride?

You are not being taken for a ride. Banks have been hit hard by developers fiddling the prices on new builds leaving banks with overvalued repossesions.

So if you want to buy a new build the bank will expect a bigger deposite to protect against repossesion of these poorer construction, smaller and over valued properties.

Pint_Glass

Thanks, I wasn't aware of this before this morning, and it makes sense now.

Gemma_B_2

Thanks Adam for your advise, my circumstances have changed since last week and I managed to cough up the 20% deposit... with great difficulty so I am now going ahead! Very happy!

I understand what are saying about your flat losing value, but I'm hoping since mine was so cheap anyway (only 90k and on market at 125k before xmas) that this shouldnt be a problem for me... fingers crossed! Still need to get my mortage approval yet so crossing toes for that one!

In response to pint glass, I think the lenders are more stingent with new build FLATS as opposed to new build houses... I was told that it would be possible to get a mortgage on a new build house at 15% deposit so may be worth looking in to although dont quote me on that... I've had so many figures thrown at me over the last few weeks its hard to keep track!

rinkydinkpanther

If you can't afford mortgage rates of 6.99%, you could well find yourself in trouble pretty soon. Rates will not stay low forever, and rates of that level are not considered high historically.