Do 90% mortgages exist for 2nd time buyers?

kaylz39

So me & my hubby are looking to buy a new build home from Millers homes. They are giving us 5% towards our deposit as we only have 5% at the minute.

We were going to carry on saving to get to 20% in 18 months or so but came across this house and the scheme by chance when walking past the estate. They only have 2 of these houses on the entire estate and it's due to be ready in August (a bit quicker than we would have liked, but the house is perfect for us). So we thought we may aswell go for it.

Anyway, were supposed to go down and reserve the plot tomorrow so called a mortgage person today (I've been trying all week, but no-one got back to me).

Our plan was to keep the house we live in now and rent it out. But she says as were not first time buyers we'll need more than a 10% deposit. She said for second time buyers they're only offering 85% mortgages and the best she found was Nationwide - 2 years fixed @ 4.59%.

Affording the mortgage and bills isn't the problem and were not stretching ourselves as we could look for something at an extra £50,000 but don't want to struggle.

Was just wondering if anyone knows any different?

If these mortgages don't exist, we'll just have to let this one go but we love it so would be great if it would work. Thanks for your advice guys!

ACG

The problem comes i think because its a new build as well.

There are a few but when you reed the bumpf with it, there is something that stops them ebign available. Ive just had a quick read though and it looks like Abbey/Santander might do it.

DONT take this as advice, its just to let you know that i think there is atleast 1 deal out there and thats a quick look so im sure there will be others.

betmunch

ACG, I'm not sure Abbey will do it (think they would for FTBers which the OP isnt). But I think I know of someone that will.

Not being 100% clear here as its definately one to check.

Get in contact with a good Independent Mortgage Advisor (during office hours!)

Oh, and you will need 10% from your own funds, no builders deposit business!

Dave_Ham

Hi - also in reference to a question you posted on another thread.

Banks are very nervous of new build properties as well and truly had their fingers burnt in the last few years...

They are incredibly hard to value in many circumstances as are no direct comparables. Additionally some less transparent builder/client combo's have tried to mitigate putting any deposits in or flipping quickly. All in all, banks have all restricted the loan to value and most have added in a maximum allowable builders incentive.

As Betmunch rightly said Abbey is a no-go at the 90% mark and there are others that will do 90% but they want at least 10% of that to be from the client (not builder)

Not being in the office, I too cannot give any more nuggets of wisdom as there may be a solution that you require but I am not super confident.

I also find agent backed mortgage brokers poor, but would expect one working for a new build company know there new build products inside out...

Good luck

kaylz39

Yeah she did say Santander would do it but for first time buyers only!

We only have a 5% deposit, the other 5% is builders contribution. Looks like it's unlikely...gutted!

I thought as we have the security of the home were in now, with equity they may do it.

I'm speaking with the IFA who did my Dads & In-Law's mortgage tomorrow...don't think he's going to tell me what I want to hear though.

Where is the best place too look for different mortgages- this site?

kaylz39

Dave_Ham wrote: »

Hi - also in reference to a question you posted on another thread.

Banks are very nervous of new build properties as well and truly had their fingers burnt in the last few years...

They are incredibly hard to value in many circumstances as are no direct comparables. Additionally some less transparent builder/client combo's have tried to mitigate putting any deposits in or flipping quickly. All in all, banks have all restricted the loan to value and most have added in a maximum allowable builders incentive.

As Betmunch rightly said Abbey is a no-go at the 90% mark and there are others that will do 90% but they want at least 10% of that to be from the client (not builder)

Not being in the office, I too cannot give any more nuggets of wisdom as there may be a solution that you require but I am not super confident.

I also find agent backed mortgage brokers poor, but would expect one working for a new build company know there new build products inside out...

Good luck

Yes, I was a bit reluctant to call her but she was the only one who called me back today. Don't think we would actually go with her, always good to speak to a few though isn't it?!

I understand what you mean now, with it being a new build. I was thinking the same when doing some research to see if it was a good buy or not.

We had a call today to say they're ahead with the build so would be completed in August, means we have to pay the deposit in April/June she said. Haven't a clue where were going to find an extra £7k in a few months?!

Another question: why don't they take the builders contribution into consideration?

Thrugelmir

Why not sell your existing property?

Does the developer offer part exchange?

ACG

ignore this post.

betmunch

kaylz39 wrote: »

Where is the best place too look for different mortgages- this site?

No, the best place to look is in a Independent Mortgage Advisors office!

If you dads mate is an IFA check that he is confident doing mortgages, a lot of IFA arent so they employ Mortgage Specialists or simply refer clients to someone else.

I agree with Dave Ham, a broker attached to the builder isnt likely to be the best, but they should know new build criteria like they wrote it themselves so dissapointed that this one couldnt place you with a 10% deposit.

You said you have until August to save up, and that you can get to 20% in 18 months, are you sure you cant scrape together th extra 5%? you dont even want to be applying until the summer so anything can happen. I'd get saving!

kaylz39

Thrugelmir wrote: »

Why not sell your existing property?

Does the developer offer part exchange?

Yes they do but I don't think it would help, we would loose the 5% they were going to give us towards the deposit.

Plus we probably wouldn't have much equity in our home, we bought it 5 years ago when the property market went mental and now it's on its a***e it doesn't help us.

betmunch

kaylz39 wrote: »

Another question: why don't they take the builders contribution into consideration?

Lots of reasons.

I feel the main one is that there is a new build premium which is gone as soon as you move in, so whenever a lender had possession of the property it can only be after someone has moved in, therfore they will never benefit from sell it with the new build premium.

Now, that assumes that everyone is 100% honest and does not do dodgy things.

More practical reasons would include builders over valuing theor properties, suveryors agreeing the value, the fact new builds lost value quicker when it all came tumbling down.... the list goes on!