First time buyer mortgage for NEW house with 90% LTV?

timborules

Hi All,

My wife and I are first time buyers - we're both on excellent salaries and have a 10% deposit.

We were looking at new houses (as in, never been lived in before!) to buy c.£250k in our area and have found some we like.

I met with my own bank today (HSBC) as they had a good offer on for 90% LTV mortgages over 30 years, seemed very competitive.

Unfortunately, though they said they are more than happy to give us a mortgage for £250k and beyond if we would like, for NEW homes you require a 25% deposit. We dont have that!

Can anybody tell me if this is a common thing? Do all lenders insist on this? Will any offer 90% LTV for a new house?

Thanks in advance!

Timbo.

Leon_W

Yes it is a common thing.

No, not all lenders insist on 25%.

Most of the high street lenders will want 15-20% but sometimes there is a fiddle to be done with a builders cash incentive that can effectively equate to a 10% deposit on a newbuild.

Best see a broker as it will be like looking for a needle in the proverbial criteria haystack.

Regards

timborules

Thanks Leon.

I did originally use a broker but the problem was that all the best mortgages were - as Martin's article suggests - available directly.

Cash incentive with builder...?

A quick few phonecalls and Skipton and Nationwide will give 10% for new build. Nationwide insist on changing accounts to them etc. though.

Do you think HSBC would be flexible? I've been with them 13 years, taken out numerous products (loan, settled early, stakeholder pension, savings, investments etc) and perhaps the threat of uprooting to Nationwide may produce something?

GMS

It would be best to see a 'Whole of Market' broker. New build properties are a nightmare at present but there are options.

This kind of thing highlights the need for a broker. Price comparison sites and the likes will only tell you the rates. Criteria can often cause the so called best mortgage deals to fall down.

There is a lender who will do 90% on new build houses for a First Time Buyer subject to criteria being met.

Leon_W

Dont waste your time with HSBC. They are uber conservative.

Next door neighbour of mine was very cocky indeed when he told me a few weeks ago that he was going to purchase a Buy to Let with a 15% deposit and was going to get a blinding deal with his bankers HSBC. How I inwardly laughed ! , always was a complete big'ed !

Forward to today and I have his mortgage offer on MY desk (obv not with HSBC !)

Regards

Henry_P_Chester

If you both have excellent salaries why not save a bigger deposit? It will save you a fortune in interest payments as you will get a terrible rate with 90% LTV.

New builds generally lose value as soon as they are bought, a bit like new cars. So lenders are more reluctant to lend against them.

timborules

Thanks chaps.

Henry: wife is pregnant and due to pop in November, so my disposable income is due to decrease rapidly! Otherwise, you are right, that is what I would do.

Funnily enough - Skipton will do their 95% mortgage on a new build. They really do seem to be throwing caution to the wind!

Bullfighter

timborules wrote: »

Thanks chaps.

Henry: wife is pregnant and due to pop in November, so my disposable income is due to decrease rapidly! Otherwise, you are right, that is what I would do.

Funnily enough - Skipton will do their 95% mortgage on a new build. They really do seem to be throwing caution to the wind!

Mental note: Remove any money from Skipton