New build mortgage LTV

Wh05apk

You may get lucky with Abbey, although their stated criteria is 80% Ltv, they are running a new "risk weighted lending" system whereby if your credit score with them is high enough elements of policy get over-ridden on the basis that you are a low risk, so they do not need to worry too much.

I would suggest speaking to a broker who is aware of this recent developement with them, so they can run it past Abbey to see if you are in with a shout, they also have a 3.99% 2 year fixed, with lower costs than Nationwide.

123lushan

leveller2911 wrote: »

Agreed but its pretty poor that you need the help from the "Bank of mum and dad" rather than standing on your own feet and save for a deposit like most people do.
I wish you luck but stop whinging ,on £80k a year theres no earthly reason why you shouldn't/can't save up .....

Yes it is poor but when they offer I'm not going to say no. (I didn't ask) I would want to do the same for my children. Without their help, my financial situation in the long term would be much poorer. Are you telling me that if my parents struggle financially when they are old (regardless of whether they helped with my deposit or now), I should say to them "wait, I earn a lot but I'm not going to help you because you should have stood on your two feet?"

We are well paid for our age, but we also pay into our pension arrangements (unlike most young people who don't think about retirement), London travel costs a lot, our rent is over a third of our take home pay (and we aren't living in a posh flat in a posh postcode!), never mind council tax, bills and food. Yes we can forgo holidays, new clothes etc, but the long hours and stress from work mean that we also want to treat ourselves occasionally. Meaning saving has been very tough without even living beyond our means. The average age of FTB in London is 38, I don't want to wait until I am 38 if I can help it.

Obviously I am not expecting everyone to understand and people will say I am spoilt. I know I am very lucky but will make the most of the opportunity I have been given and get myself on the property ladder in London. So related advice would be very appreciated.

123lushan

GMS wrote: »

Could you not find a house at 400k? Takes away the issues at a stroke.

In London? New built? Not a chance.

A two bed flat yes, but we have struggled so far unless we want to be an hour away from work or buy in a less reputable area like Stockwell or Brixton (we definitely need a 2 bed as we are still studying for professional exams for the next year and half so will need a study).

GMS

123lushan wrote: »

In London? New built? Not a chance.

A two bed flat yes, but we have struggled so far unless we want to be an hour away from work or buy in a less reputable area like Stockwell or Brixton (we definitely need a 2 bed as we are still studying for professional exams for the next year and half so will need a study).

Does it have to be a new build?

123lushan

GMS wrote: »

Does it have to be a new build?

Sorry I think I have misinterpreted your question (for new built house it's 85% LTV compared to 75% for a flat)

£400k was our original budget...of course if we could find an older flat within our budget that's in a good-ish location and large enough we'd have gone for it. So far the market is so stagnant in London, and we feel a lot of the properties are overpriced a little but the buyers won't budge. We don't want to overstretch ourselves and get into a 10% LTV zone where the rates are much poorer. This new build isn't in our favourite location but is convenient for work and very big, which is why we were tempted.

Thanks about the Abbey information, I'll forward it to my broker.

leveller2911

123lushan wrote: »

Yes it is poor but when they offer I'm not going to say no. (I didn't ask) I would want to do the same for my children. Without their help, my financial situation in the long term would be much poorer. Are you telling me that if my parents struggle financially when they are old (regardless of whether they helped with my deposit or now), I should say to them "wait, I earn a lot but I'm not going to help you because you should have stood on your two feet?"


Guess I'm old school in thinking that we should all stand on our own feet.I think its very important to help elderly parents probably moreso with practical help rather than financial.

With your income you don't need help you need to keep working hard and save like the vast majority of people do. Theres no rush for you to buy,your young earning a good income and time is on your side.

Helping out elderly parents financially is different in that they have hopefully worked hard and planned but if something happends that they are financially struggling in old age we/you should help but giving young people large sums of money is not the same, you haven't actually planned anything yourselves........ You stated your parents are paying the deposit, at your age I was earning £15k a year but I still had £7k in savings.....

I still wish you luck for the future.....

123lushan

Leveller2911, I can definitely see where you're coming from and thanks for your opinion. Also understand that if we waited, we'd have a bit more money ourselves. But when you pay 20k in rent every year like we do, it really hurts. 20k (after tax) is a lot of money. Our rent is also going up year on year and we can't afford to change flats because rental prices in London are also insane. In addition, we didn't ask for this money but were offered help, but when the opportunity presents itself, it's very difficult to say no, especially when we realise how long it will take us to save the same amount of money if we didn't accept the help. Pride vs real savings....So we'd much rather take the money now and pay them back later on when we are financially more comfortable. Sounds selfish I know, but this is the harsh reality, and let me reiterate how grateful we are to our parents. We are not frivolous people and work very hard. If this was 10-20k we need, then we would have waited and saved. But this is a much larger sum, an amount that'll take us at least 3-5 years to save up, by then property prices would have gone up and we would have thrown away 70-100k in rent.

chopper78

How do you know £400k is your budget? The whole point of an AIP is that a bank gives you an AIP before you can go putting in offers on properties. A property at 'well over £400k' should be out of reach for a total income of £80k per year as that is 5x income multiple.

Newbuild flats anywhere go into negative equity straight away, there is a reason why banks have stricter lending criteria for new build flats compared to new build houses.

Maybe set your aspirations slightly lower and accept a bit of a commute?

£400k for a 2 bedroom flat? SHEESH!

123lushan

Believe it or not, all the banks I spoke to said they wouldn't give me an AIP until I've put an offer in on a place. They would only tell me how much I can borrow, subject to credit checks. Which is how we came up with 400k (borrowing 340k which is 4x our gross income). I thought this was odd as you'd feel more secure with an agreement in place, but the banks were adamant this is how it works (is London just weird)

I agree living further out would solve the problem automatically, but try persuading a 25 year old guy who still wants to live the London life a little and get in the office at 7.30am. Anyway, it's not relevant to this topic (something to consider should the deal fall through).

I'd still like more advice on where I could possibly find a 15% LTV mortgage on a new build flat. Thanks.

kingstreet

123lushan wrote: »

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

If I were your broker, I'd be very worried about this. ^