First time buyers (for newly built flats) - offer from brooker , plz help

aba06

I have no idea if this mortgage offer is good. Any advice would be great?
All info. below:)

The information includes competitive fixed rates for 2 & 3 years for the two scenarios we discussed:



1. Property price £170,000, with a mortgage of £144,500 (85%LTV)

2. Property price £130,000, with a mortgage of £104,000 (80%LTV)

1. Fixed Rates

Product Term: 3 year fixed, Interest Rate: 4.13% Lender: woolwoch/barclays, Max. LTV: 85%, ERC: £275 + 3% First 3 years, Product Fee:£499, Monthly payment APR:£773.13 3.80%


ERC: Early redemption charges (can be added to the loan)

-As the flat is a new building, we only have this option from Woolwich for 85% LTV. This lender did not offer a 2 year fixed products for 85% LTV.???????????


2. Fixed Rates

Product Term, Interest Rate, Lender Max. LTV, ERC, Product Fee Monthly payment
2 Year Fixed, 2.99%, *The Mortgage Works, 80%, £275+ 3% First 2 years, £1,560 + £99, £492.64, 4.70%
2 Year Fixed, 3.48%, Woolwich / Barclays, 80%, £275 + 3% First 3 years, £999 £519.53, 3.70%
2 Year Fixed, 3.49%, Nationwide BS, 80%, £90 + 3% First 2 years , £499 £520.09, 4.10%
3 Year Fixed, 3.64%, Nationwide BS, 80%, £90 + 4% First 3 years, £499 £528.49, 4.10%
3 Year Fixed, 3.89% , Woolwich / Barclays , 80% , £275 + 3% First 3 years, £499 £542.65, 3.80%

Thank you:)

dimbo61

My Views ( not advice!)
First time buyers ( 2!) and New Build flats !
Have you got a good strong relationship ? Do you plan on living in the flat for the next 4/5 years ?
Do you plan on having kids ? Is there enough room ? management costs for upkeep of lifts,gardens, hallways, etc
I like the look of the Nationwide 3 year fix as ( please check KFI,s mortgage details) they allow upto £500 a month overpayments !
It does have the highest ERC so dont take it if you plan on moving in 18 months due to breakup or new job.
Having a 3 year fix gives you time to pay off some of the mortgage debt ( and 3 years security) and get your LTV below 75% or even 60% with overpayments
Its your decision as only you know if the cheaper flat is big enough for your needs and please use "whatsthecost" to work out the difference in cost of a £104,000 mortgage and a £144,500 mortgage

kingstreet

Firstly, I do not rate your chances of an 80% or 85% mortgage on a newbuild flat with Nationwide as;-

The maximum loan to value on New Build Flats is 75%

http://www.nationwide-intermediary.co.uk/content/lendingcriteria/property_and_construction/valuation.aspx#newbuild_valuation

Knowing how Nationwide value newbuilds, it's the last place I'd go for a mortgage on a newbuild property. The Mortgage Works, being part of Nationwide, works in the same way.

Nationwide instructs its valuers to value all new properties (flats, houses and maisonettes) as if they have already been occupied and are being resold for the first time.

This reflects Nationwide's desire to protect both the lender and the borrower from the potential risks in this market. It will help protect borrowers of new build properties from the risk of negative equity by ensuring that the valuation given is a true representation of a property's resale value. The 'resale' value is based on comparable evidence of properties that have been occupied which may result in some new build properties being valued at below the purchase price.

Where a new build property is valued at below the purchase price, and the loan is affected, a copy of the report can be provided to the customer, who will then have the option of a reduced loan or renegotiation of the purchase price. The valuation fee is non-refundable once a valuation has been carried out.

The definition of a 'new flat or house' includes maisonettes and means one that has not been occupied within two years of construction, conversion or refurbishment. This includes properties being bought off plan.

kingstreet

The max LTV for a newbuild flat is as follows;-

Nationwide 75%
Northern Rock 70%
Cov/Godiva 75%
Accord 75%
Leeds 80%
Abbey 70%
Halifax 80%
Woolwich 85%.

I wonder who's getting all the newbuild flat business right now?

aba06

thank you all, but still don't know if the scenarios proposed by my broker are competitive.

kingstreet

aba06 wrote: »

thank you all, but still don't know if the scenarios proposed by my broker are competitive.

Forgive me for not being totally clear. You have extremely limited options.

Lenders do not want to lend on newbuild flats. It's very much a case of "have what you're given" at 80% and 85%.

GemBlueTopaz1984

Hi,

I might be completely off the mark but how can a erc be added to the mortgage, am i wrong in thinking that an ERCis applicable is when you sell or remortgage before the fixed period ends, if so how can it be added to the mortgage.

kingstreet

GemBlueTopaz1984 wrote: »

Hi,

I might be completely off the mark but how can a erc be added to the mortgage, am i wrong in thinking that an ERCis applicable is when you sell or remortgage before the fixed period ends, if so how can it be added to the mortgage.

You're quite right. It is and it can't.