New build Discount, Mortgage and Valuations with added Part Ex

badgeraudio

Hi,

I am in the process of getting a mortgage for a new build property.
I need 90%Ltv due to low deposit. AIP was fine and I can borrow more then I need.

New build priced at £240K

got a 5% (£12K) deposit paid by David Wilson's
£2.5K towards early repayment of previous Mortgage
£2.5K towards move costs

Current House:
Worth £135K ish!
they will give me £123K for it
mortgage remaining £120K meaning very little equity!

Now all was going well. I Spoke to Nationwide and she did advise that they can under value New builds due to having to value them at second hand prices. But she spoke to the valuer before I instucted the valuation who assured me for this estate it should be fine. And that the 17K discounts from David wilsons was fine and normal.

Just had a call from Nationwide saying valuation is in ..... £223K

Now this just looks to be very simple maths £240k asking - £17k discount. = valuation
But if they knew that before why whas I not told as I would have known it would be under valued.

If I got the developer, David Wilsons, to sell me it without discount, But put the part Ex up by £17K would Nationwide than value it £240k??

Anyone got any advice for me, apart from saving more!!!

The worst part is I just payed £500 for half a days work for someone, who just did a very simple bit of maths!

Mike

badgeraudio

Just Spoke to Nationwide.

2 points:

1) the positive feedback from teh valuation company prior to the actual valuation was from a different person who did the valuation, even though he said he would do the actual valuation

2) apparently the £17K discount has nothing to do with the £17K short fall in the valuation, it is just co insidence!

Nationwide are trying to get hold of the original valuation guy, who gave the positive feedback over the phone for his thoughts!

Cheers

Mike

Fire_Fox

Why do you think your house is worth £135K, based on what? If it is worth £135K why would you not sell the house for that instead of accepting a low offer? Deposit paid schemes are often funded by inflated valuations on the new build, not by the developer losing profit. Sounds to me like you cannot afford this house at the current time, sorry!

badgeraudio

I think it is worth that due to others being sold for around this figure.

Your right I could sell then buy, but I wanted to move sooner rather then later.
Cheers

Kyrae

How about asking the builder if they have any assisted sale schemes? Some builders will pay the selling fees and HIP pack etc for your current house if you're buying a house from them. Might take longer but you might get a better price for your house

DVardysShadow

badgeraudio wrote: »

New build priced at £240K

got a 5% (£12K) deposit paid by David Wilson's
£2.5K towards early repayment of previous Mortgage
£2.5K towards move costs

And if you sold it the next day for £240k on those incentives, you would have paid the builder £228k and still have £5k in your pocket. It is worth £223k. If it is worth more, someone would have put an offer to the builder which is more attractive.

brit1234

Why do people always want to overpay for houses. Its well known new builds are overpriced.

It makes me angry when people are trying to inflate the marke making it harder for ftbs

badgeraudio

Im not trying to inflate the price, just pay what I think its worth.

Just a shame nationwide do not agree with my valuation!

DVardysShadow

badgeraudio wrote: »

Im not trying to inflate the price, just pay what I think its worth.

Just a shame nationwide do not agree with my valuation!

You are paying £223k.

Nationwide value it at £223k.

I think that the gap in your mind is unbridgeable.

badgeraudio

I know, there is no way I can afford it!

My only thought is how the valuation has come out to be exactly the same as the house price-discount. Had we not got the discount would the value have been 240K??

If so could we get them to give us the discount money via an increased part ex??

In the end we are going to loose this property as Im now sure they wil not lend us the money to get it, Its a shame but a looking ever more like fact.

Mike

DVardysShadow

badgeraudio wrote: »

My only thought is how the valuation has come out to be exactly the same as the house price-discount. Had we not got the discount would the value have been 240K??

Possibly the valuation could have come out at £240 if you had gone that way. One thing is for sure, they will never value more than you paid - on the basis that if it was worth more, someone else would be buying it at the higher price.

Probably, you would have done better by getting a higher partex value, because this is not so transparently obvious to the valuer. But one day, I imagine even this route will be closed, with the lender valuing your old property too, unless you sell on the open market.