Help! Just about to loose 26k on deposit on new flat - advise please

grey_lady

Are you tied in with Bradford? Have you tried speaking to any estate agents there to see if the flat is worth what you think and the chances of you being able to sell in a hurry?

simyboye

Grey_lady. I will ring them tomorrow. I was waiting for the investor to get back to me today and guess what...?
Bradford (I believe) was no tie-in. However, same thing applies. Who's going to buy a new flat that cant raise a mortgage?

grey_lady

But you can walk away from Bradford without losing the deposit?

silvercar

I think it is you that would have difficulty getting a new mortgage on a place you have owned for less than 6 months; its to stop no-money-down and day 1 remortgage deals. A new buyer should be OK although the lender could be sniffy if the value has increased with no evidence of property improvement.

Thrugelmir

jaynes2326 wrote: »

Professional negligence - if you weren't strongly warned of the dangers of exchanging without a mortgage offer in place then I think your solicitors were negligent and you may have a claim.

So easy to say with hindsight. The OP was buying this property as an investment, in effect a commercial transaction. So should have made themselves fully aware of the potential downsides of entering into a contractual arrangement. Would the builder have done likewise if property prices had risen and refused to sell?

simyboye

Pardon me, whats OP mean?
And I dont think I can just take my deposit from Bradford. I have to complete on it and sell to take my money back.

InMyDreams

simyboye wrote: »

Pardon me, whats OP mean?

OP - original post or original poster. ie you, in this thread.

mynameisdave

My personal opinion (please dont take this as professional advice) would be to get the Badford one bought and sold ASAP.

If you are buying for 68K and have a 16K deposit then you are near enough BTL territory so you dont have to worry about any questions as to why/when you are relocating. If it is worth 99K then even after solicitor fees, mortgage arrangement fees, and redemptions fees you can get your money back (possibly even a small profit) even if you have to sell it for 80K to get shot of it in double quick time - be very careful what mortgage product you take out as I think some do not allow for immediate pay off - maybe a 6 month period before it can be cashed in.

For arguments sake you make £5k out of the Bradford place and with your initial 16K deposit you have 21K. This gives 47K to go towards the Edgeware flat. This is 20% deposit. Coupled with you salary and profit on rental income with 6 months delay its not unreasonable to get up to 25% deposit there and that can put you back into BTL territory.

I cant see anyway you are going to get into residential mortgage territory unless you make the 30K in Bradford. ~70K deposit is pretty chunky and with mad mad mad saving you could squeeze into residential mortgage levels.

IFA and solicitor advice is definately needed though.

Out of interest, where do you currently live? You mention you own a house but it is rented. Any application for a mortgage will want to know your outgoings and it appears you may be renting or own elsewhere.

grey_lady wrote: »

But you can walk away from Bradford without losing the deposit?

If this is true then its a no brainer IMO. OP should take the money and run!

mynameisdave

simyboye wrote: »

Geoffky - I want to give the investor a good physical warning. However I have reserved Bradford, so I need to sort Edgware out, then Bradford and then maximum attack on sorting the investor out. All's fair in love and war eh?!

If you have reserved then I assume you have paid a fee of around £1,000 to secure the plot. Until the contracts have been exchanged then you should not have paid the deposit.

Have you actually paid the £16,000 to anyone? The investing group, developers, builders, solicitors, whoever? If you have not paid and have not signed a contract then I would say you can walk pretty much penalty free

simyboye

Morning, I bought a development in Liverpool. I put 16k down on that. However there were implications with regards to asbestos so that project got put back. I was then given the oportunity to get into one of the other developments. So I chose Bradford. But again, this is investors telling me its worth XYZ.

Lister mills is the development. I'm off to check it now.

Thanks again for your help.