I think my whole sale/purchase is about to go t!ts up.

Babiesmummy_2

We are part exchanging with Bovis, mortgage offer received from Northern Rock approx 2weeks ago, as far as i'm all aware all queries relating to the properties have been answered and we were just waiting for all docs to be sent through the post from the solicitor for us to sign (we live in a different area).

Just recieved a call from solicitor and Northern Rock have kicked up a fuss based on the incentives that have been disclosed relating to the purchase of our new house. We were getting the Stamp Duty paid (£2449) , carpets, house alarm & turf included in the deal as well as £5,000 off the asking price.

Northern Rock want to with hold £2449 (Stamp Duty) and also want a cost for the other incentives which my Solicitors think they will also with hold.

None of this was witheld from my mortgage broker, I guess this would have been passed on should Northern Rock have requested it.

My Solicitor is currently in contact with my mortgage broker to try and find out any more hoping this is just an administritive error (already had one relating to the valuation).

Any advice would be appreciated on what options I have.

Thrugelmir

NR should have been informed of the incentives at the outset. Why would they ask for something they (presumably) knew nothing about.

Babiesmummy_2

My mortgage broker was aware of the incentives, so I presume these would have been passed onto NR.

I thought it would be pretty common for incentives to be offered on a new build, so I am guessing there should have been something on the application with regards to this.

beecher2

'presume' and 'guessing' - you need to wait to find out what the broker told NR.

Conrad

Another slack broker here. The NRock online system does not allow the input of such info, so in this event we would have called and written N Rock to ENSURE the points were covered up front.

Sounds like your broker is quite new, if not then he's plain slapdash.

Babiesmummy_2

I have just spoken to my broker and he is trying to sort it out now:o.

I am waiting for the call back. I will post when I have more info.

Babiesmummy_2

........update

I spoke to my broker yesterday, the £5,000 discount off the house price was declared but the Stamp Duty, carpets, alarm, turf (£3880) weren't.

My broker has agreed that the Stamp Duty should have been declared but wasn't aware it was being paid by Bovis, eventhough this was discussed at the time of application it obviously didn't register with him.

As far as the other incentives are concerned he said that non-cash incentives do no need to be disclosed. (I don't know if this is true or not) So he is in contact with NR to try and sort this out.

So he has now suggested that as NR don't want to part with £2500 and reduce the amount they want to lend, (from £169,000 down to £166,500) we should go back to NR and ask to be leant a higher amount of £171,500 (70% LTV) (previously 68.94%) once they have deducted the £2500 they won't lend us for the Stamp Duty we are back down to £169,000. (hope this makes sense)

All figures are approximate rounded up/down.

Or the alternative would be to ditch NR and start a fresh with another lender but obviously that would have financial implications. Completion date is approx 25June.

babyharry5

we are buying a new build as well, but disclosed the stamp duty incentive at the start.

in general, builders increase the value of the property to cover for the incentives they are giving, therefore giving a false valuation of the property.

NR will already have done a valuation - which is 99.9% of the time, the same as the purchase price. It will be extremely doubtful, that they will alter that valuation in order to increase the funds to cover the stamp duty.

FraudBuster

CML Disclosure of Incentives Form

The purpose of the form is to draw all the relevant information about newly built, converted and renovated property transactions into a single form. This will improve transparency and simplify the flow of information to all key parties involved in the transaction.

http://www.cml.org.uk/cml/handbook/form

Babiesmummy_2

babyharry5 wrote: »

we are buying a new build as well, but disclosed the stamp duty incentive at the start.

in general, builders increase the value of the property to cover for the incentives they are giving, therefore giving a false valuation of the property.

NR will already have done a valuation - which is 99.9% of the time, the same as the purchase price. It will be extremely doubtful, that they will alter that valuation in order to increase the funds to cover the stamp duty.

The issue isn't the valuation, that is fine. We are putting in just over 30% equity from our current house into the purchase of our new build. We are only increasing the amount we want to borrow for NR to say fine you can borrow upto 70% but we will deduct £2500 from that figure for the Stamp Duty which brings us back to the original figure we were requesting from them.

It took me a while to get my head around this and I may not have explained it clearly but that is the best I can do.
nb. we are also keeping back £15,000 equity from the sale of our house to cover costs / fees etc.

I didn't withold the information about the incentives from my mortgage broker, I remember having the conversation with him about the offer that we agreed with Bovis and that the fact that Bovis were paying our stamp duty means that, that amount will cover our ERC.