Mortgage Advice w/ New Build

Coded

We've been searching for a house for a while now, we are first time buyers.

We recently went to see a development that has been running for about 2 years, with about 1 or so to go.

The house we're interested is a townhouse (end) 3bedroom, 3storey. It was priced at 175k, but said she could lower the price to 165k, with 5k going towards 'extras'.

The other end townhouse has been sold, and the middle townhouse is being sold at 175k but down to 160k. The structure of the house is up and they've said it should be ready Dec/Jan time.

We have enough for about a 15% deposit (slightly more). However most banks need a 20% deposit for new build.
I noticed Nationwide dont, but read on the internet that their valuation usually comes in 10% lower than normal.

Originally we were going with either Natwest or Lloyds.

Are we going to have a problem with a valuation from any mortgage lender?

Thanks for any help.

_Andy_

Quite possible - new builds are typically over-priced and will normally devalue as soon as you buy them.

Coded

So will the valuers ignore the 175k and 165k, get a value on their own on xK and take 10% off of x?

Id agree that 175k is slightly overvalued for this part of the country, but 165k looks like a better price, hence why we are interested.

peld

I dont know whereabouts in the country you are but im in a similar boat (looking at new build mortgaes, though a while away from buying yet, although im not a FTB).

I spoke to "Liftime Planning" in Glasgow, and although didnt get any exact quote, certianly led me to believe there were 90% mortgages for new builds. Google them and give them a ring for a chat ?

tomthelondoner

Nationwide max LTV for new build houses is 90% and their policy is to value everything as second hand.

mortgage-adviser-now

Coded wrote: »

We've been searching for a house for a while now, we are first time buyers.

We recently went to see a development that has been running for about 2 years, with about 1 or so to go.

The house we're interested is a townhouse (end) 3bedroom, 3storey. It was priced at 175k, but said she could lower the price to 165k, with 5k going towards 'extras'.

The other end townhouse has been sold, and the middle townhouse is being sold at 175k but down to 160k. The structure of the house is up and they've said it should be ready Dec/Jan time.

We have enough for about a 15% deposit (slightly more). However most banks need a 20% deposit for new build.
I noticed Nationwide dont, but read on the internet that their valuation usually comes in 10% lower than normal.

Originally we were going with either Natwest or Lloyds.

Are we going to have a problem with a valuation from any mortgage lender?

Thanks for any help.

Simple answer

Tell the Builder you will buy at £170,000 but you want a 5% deposit paid by them on completion.

(This brings your net cost down to £161,500)

You then put in your 15% (£25,500) and get a 80% LTV mortgage for £136,00.

The only things you need to watch are:

1. Not all Lenders will allow the 5% builders deposit

2. You have to complete by 31 December 2009 as the stamp duty threshold is due to come down to £150,000 on 1st January and you will be £1,700 out of pocket.
(Tell the builder if they dont complete this year they can pay the stamp duty)

Hope that helps

I am a Mortgage Adviser

You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.