Advice on New Build Flat Mortgage Please!

beecher2

I was thinking it must be the Lochburn Gate flats, but they're in Maryhill which wouldn't be described as 'prosperous' so I must be wrong. Hope you get the valuation you need - I don't think you get what a huge risk it is to have signed the missives before getting a mortgage in place so I hope it works out for you.

gpconfused

hi - no they are not the lochburn flats in mayhill.

I appreciate what you are saying regarding signing the missives before a mortgage is in place. However, there was no other choice. Dont sign the missives = flat is not reserved for me.

Thanks

ankspon

BEWARE,i have a new build and the soundproofing is atrocious

Conrad

gpconfused wrote: »

the flat is in quite a prosperous area with lots of large, older style sandstone detached houses, very close to the west end of glasgow. i really dont envisage any problem with the valuation....fingers crossed.

New build flats are uniquely more risky for lenders due to;

1) Once bought, the next buyer in line will not have the 'brand new' premium or get to chose any decor the developer gives option on

2) The next buyer (following repo) will not have the builders £5k incentive so won't percieve value the same way you do

3) Typically a goodly portion of new build blocks tend to be let out and tenanted property tends not to be as well looked after as owner occupier and this has an effect on communal areas such as landings

4) Because of the typical proportion of let property in a development, rents tend to fall and prices also therefore take a hit

5) In many UK urban areas the market has become clogged with new build which gives buyer far more choice and reduces prices. Cardiff and Ipswich to name but 2 have seen dramatic price down pressure due to over supply


Owners always always say it wont apply to thier block as it's special.


The most likely outcome here is any lender will lend you 75% of the reduced valuation. The £5k in theory can be used by some lenders as you say but it's very much case by case.

Such discussions as this are largely academic until a lender does the valuation.

Hope it all works out, but best to be prepared for trouble rather than optimistic only to be the dissapointed.

gpconfused

Hi Conrad

Thanks for your post. I appreciate all your points however i am happy with the decision i made. i spent the best part of a year looking for a property. It really confuses me but people seem to forget that at one point in time...every single house that exists today was a "new build" - someone has to be the 1st to move in - and in this case I am happy its me, with the opportunities it gives me and the knowledge that i will be the first to use the utilities etc and play a part in how it is designed.

I am in no way kidding myself on in thinking that applying for and obtaining a mortgage is going to go as smoothly as i want. Today i have spoken to both Nationwide and Lloyds and they have both confirmed they will accept the 5k discount as contribution to my deposit...allowing me to reach the magic 75% LTV mark.

All to do now is to decide which bank to go for...and whether or not to apply for a tracker or fixed.

Any advice on this would be much appreciated? The best deals i can see are as follows:

2yr Fixed - 3.79% (£896 product fee onto loan) - Nationwide
3yr Fixed - 3.94% (£1495 product fee onto loan) - Lloyds

5yr Fixed - 4.59% (£895 product fee onto loan) - Lloyds
5yr Fixed - 4.89% (£396 product fee onto loan) - Nationwide

The thing that is putting me off Trackers is the Early Repayment Charges i would be forced to pay by jumping to a fixed during the initial period if the BOE rate starts to rise.....

Anyone got any ideas?

beecher2

The most important thing for you is the valuation you get - I'd recommend seeing an adviser who will have experience in the local market and will know which of the lenders is most likely to value your property at the price you've already agreed to pay. You may well find yourself having to magic up more deposit if the valuation doesn't come back as the LTV will be based on valuation and not the price you've paid.

I'd go for a long fix, as the chances of you having an LTV of 75% in 2 years time seems overly hopeful.

gpconfused

you read my mind....there is a mortgage advisor who has done 90% of the properties in this development who seems to have the surveyors of Lloyds valuing favourably for the clients. however, the dealings i had with him last summer were not positive...his attitude was all wrong and he was very pushy.

however, i am tempted to just go to him with the mortgage product i want and allow him to do the rest...at least this way i am more likely to get the valuation i require.....what you think?

i am leaning to towards the 5yr fix from lloyds at 4.59%.....

beecher2

Not sure - sounds a bit suspicious that he's done 90% of properties. Is he independent? Ask around at work and amongst family for suggestions of people. I'll send you a PM about the company I used, but obviously feel free to ignore it!

gpconfused

according to the developer he has done most of them. but i was suspicious about using a mortgage broker advised by the developer. however, in my brief discussions with him he did have a lloyds surveyor look at the plans and agree to value at the desired value.

thanks - ill have a look...much appreciated.

Conrad

Don't forget lenders have a range of direct only deals which the broker cannot access.
Will the builder still give you the £5k if a down valuation occurs?