New build mortgage LTV

123lushan

I don't really know about the reservation period. We were meant to exchange by 20 Jan and literally signed
the reservation form an hour before closing.

BoGoF

New builds are priced for negotiation so the buyer thinks they are getting a bargain.....but I have no knowledge of the London market. But don't have your head turned by the show homes !

Ok, let's say your reservation fee reserves the flat for x amount of days, that gives you x amount of days to see exactly what you can borrow. If you can arrange an agreement in principal you pull out of your original deal then negotiate on the price.....if you can't knock £500 of your original deal then you are doing something seriously wrong.

123lushan

I got you! That is very clever (far clever than my silly tricks) Because by then some time would have lapsed. Which means they would be a little more desperate to sell. We were meant to exchange by 20 Jan when we pay 10% of the price.

My only concern is, we picked the cherry of the block (it's an apartment block), on the corner, dual aspect, top floor. But then again, if we get £500 knocked off we wouldn't lose anything! Or I could ask for some upgrades blah blah.

Obviously this is depending on us getting a mortgage. Fingers crossed for Nationwide being kind. The government's scheme doesn't start until spring (learning so much tonight) and completion is May/June so chances are we are still screwed.

Thanks so much. I would welcome any more bright ideas!!

BoGoF

Don't restrict yourself to Nationwide though, maybe approach a broker. You may get some on here tomorrow with more advice.

123lushan

That would be super. We were recommended a new homes mortgage broker by the developer because they needed a reference number for the reservation. Boyfriend who spoke to the broker said (whilst I was mass panicking) that we could borrow how much we wanted according to the broker but unless the rate is about 4% which is what Nationwide is offering and that's the lowest I've seen for 85% LTV deals, we wouldn't be able to afford the monthly repayments.

But please, I appreciate all your advice! So lucky you saw my post so thank you.

BoGoF

Final piece of advice, never ever go with the broker the developer steers you towards.....there's a reason why they do that.

123lushan

It's New Homes Mortgage - do you know anything about them?

If you can recommend any good brokers that would be fab thanks.

rb10

Have you been looking at http://www.nationwide-intermediary.co.uk ? If so, then note the bit at the bottom that says:

This website is for use by professional intermediaries only

If you're looking at getting a mortgage directly from Nationwide, then you need to look at the Nationwide website - https://www.nationwide.co.uk

GMS

The main issue is that you are looking to buy a flat. If it was a new build house then you have far more options. New build and flats are just about the 2 worst combinations possible for mortgages.

Negotiating a reduced price will lower the amount of deposit you need but unless it is a huge discount (which is unlikely) then you will still fall into the 85% LTV bracket. Lenders will use the LOWER of the purchase price OR valuation figure to calculate lending.

Speak to a broker asap. Easier than trying to get answers on a forum from people who do not knwo your full circumstances.

As has been said earlier, stay away from the developer broker. They are working for the developer primarily. Your available mortgage amounts will be known to them and could possibly be leaked to the developer who will then know what you can borrow and potentially reduce your room for negotiation. Shouldn't happen but plenty of tales of it having done so.

123lushan

It was the intermediary website I looked at, plus I read it from a few other sources (articles written in October 2011), which said 75% LTV for new build flats.

The actual Nationwide website had no mention of new build LTV restrictions, unlike ALL the other banks and building society websites I researched. So I want to know why because this is very misleading. When I spoke to the mortgage adviser from Nationwide, he said he can't give me an AIP until I have actually put an offer on a place then we would be working with an actual price, rather than a hypothetical one. But he did tell me how much we could afford with our circumstances and what the repayment would be, for a 85% LTV deal. Again no mention of new build restrictions but I didn't ask.

New Homes Mortgages called today and we have arranged a face to face meeting a week on Tuesday. I've made sure to ask that there's nothing to pay upfront, and if we did get a mortgage through them, it'd be £135 payable at completion, which seems reasonable, and better than what some people have been saying on the forum about New Homes Mortgage. Again, we are just exploring all options, and will speak to other brokers as well that aren't recommended by the developer.

Saw this broker recommended by MSP - London and Country mortgages. What do people think of them?