Discounted for Sale - who will lend?

GMS

cmma01 wrote: »

I've spoken to two lenders who do shared ownership. The first said that applications for mortgages for these properties were closed for now. Even when I said it wasn't shared ownership, they just said no anyway.

The second offered an interest rate of 5.29% to start with.

When I said to them it's not Shared Ownership, they said that it was the only pigeon hole that could accept the property. Maybe they could try thinking outside the box a little! This is an unusual ownership. I think they do this sort of thing much more overseas than here.

The last house my son went for on the open market, he was accepted for a 2.19% tracker at 70% LTV (open market). Sadly it fell through as seller's deal fell through. But I think you'd understand his reluctance to proceed a 5.29% deal after that!

Big difference in rate but the problem will be finding a similar rate for the unusual transaction.
If it is the house he wants then he may well find himself with a 'take it or leave it' scenario with regards to rate.

I would spend a bit more time calling lenders, or ask a broker to deal with it.

SouthCoast

Are any mortgage lenders actually interested in getting involved with complicated deals of this nature?

ETA.

Sounds like scheme dreamt up to sell overpriced affordable property to people who cannot actually afford it.

cmma01

SouthCoast wrote: »

Are any mortgage lenders actually interested in getting involved with complicated deals of this nature?

ETA.

Sounds like scheme dreamt up to sell overpriced affordable property to people who cannot actually afford it.

Clearly not!

But it's not overpriced. The other houses on the scheme that aren't part of the affordable property portfolio have been selling at the OMV that equals the price that this house would sell at if it were marketed at 100% value. The house is identical. It's just one of a few on that estate that have been designated affordable housing properties.

And we could afford it if the lenders would just recognise that there's no catch in the deal and offer a mortgage product that matches what they've offered him in the past for other properties. It's just a house with a virtual value, that's all.

I also feel for the vendors who are desperate to move. They're never gonna sell at this rate.

Yorkie1

cmma01 wrote: »

Clearly not!

I also feel for the vendors who are desperate to move. They're never gonna sell at this rate.

Something to bear in mind for the future perhaps - how easy will it be to either remortgage or sell on?

PasturesNew

This is the problem, it's all right for people to sit on their bums inventing these fancy schemes, but if they're going to do it then they should at least be obliged to have a list of 3 lenders that would be prepared to lend in principle.

CloudCuckooLand

cmma01 wrote: »

It's just a house with a virtual value, that's all.

Wonder what the neighbours think, when a 'Discounted' house sells for 70% of real market value, and appears on Land Registry...

Is it going to drag down, price-wise, the entire street?

Raggs_2

Not quite what you are looking for. But, if your son can afford a 60% ltv on this property, he can get a 75% on full price. Is he really someone who deserves a shot at such discounted housing?

More on topic, as someone said, your best bet would probably be to talk to the council, and see what exactly they were expecting to happen (and who, if anyone, they had talked to).