Newbuild 90% mortgage - PLEASE HELP!!

cmccar15

Hi,

This is our situation:

We are about to purchase a 4 bed detached newbuild for £195,000 (was 215K but the builders dropped the price)

We are having a dilemma because there are lots of pro's and con's to go ahead with it. We are moving for school purposes.

We have part exchanged with Taylor Wimpey and they have agreed to pay us £128,250 for our property (a good deal) and pay our stamp duty costs and £2,000 towards extras for the house, and also pay our estate agency fees.

The house is absolutely ideal as we only could afford a 3bed detached and this house is a 4bed for the same price, in the location that we wanted to, as we were moving for our daughter starting school in 2 years time.

Here where the dilemma is, the builders have only gave us 24 hours to make our decision. We need to tell them tomorrow afternoon.

The big pitfall is when we enquired about this house and mortgage advice, we got a better deal but since then we did not take into account the early repayment charge to Nationwide and this has put us over our LTV. We also have a rubbish interest rate because its a newbuild. This has put our payments to £1,099 instead of £860 and im now sweating about this.

We could pay the extra (just!!) we would need to live on beans and toast! Its a 2 year fixed and after that period it goes down to £860 which is fine. Im then thinking its only 2 years of tightening our belts etc then its fine.

I dont want to regret not taking this house as its everything we want and more but dont want to make a huge mistake with the monthly payments either. Im a nurse and im sure i can pick up the odd extra shift here and there.

We are currently paying nearly £800 anyway just now, and dont really want to walk away from this deal as we would need to sell this house ourselves and pay the costs etc and wouldnt get that size of house for that price.

Just need a bit of friendly advice

Thanks!!!

kingstreet

Its a 2 year fixed and after that period it goes down to £860 which is fine. Im then thinking its only 2 years of tightening our belts etc then its fine.

Surely, if rates are higher in two years, you may come out of your fix to higher payments, not lower ones...?

Beckyy

Have you been to see an Independant Financial Advisor?

Things can change very quickly regarding which mortgages are available, and best for your situation. We had an agreement in principle for our recent house purchase, but were then refused because I had only been in my current job for 8 months (we were unaware this lender required 12+, even for 2nd applicant). But our broker found us a better deal which wasn't available originally.

poppysarah

Yes it's a good deal. But don't be bullied into rushing.

You probably won't like scrimping and saving excessively ...

cmccar15

Thanks everyone

We need to let them know by this afternoon, as we are accepting the part exchange offer and it they only give you 24 hours to decide if you want to accept the offer and go ahead with the sale.

I think we have been stung because its a newbuild and we have a rubbish interest rate. I can scrimp and save for two years if it means we get a house that we want and wouldnt be able to afford any other time cos they have dropped the price just now.

I just dont want to walk away and in a few months time regret it

poppysarah

But you don't want to rush into it and then be tied to a property which breaks the bank.

I would play it safe and not stretch the purse strings.

cmccar15

Yeah, i know what you are saying but i could always up my hours in work eventually and this way we are not paying estate agency costs to sell our house just now and the builders are paying stamp duty and extras.

I think its too good a deal to pass on it, i think i will regret it

Notmyrealname

cmccar15 wrote: »

The house is absolutely ideal as we only could afford a 3bed detached and this house is a 4bed for the same price, in the location that we wanted to, as we were moving for our daughter starting school in 2 years time.

Here where the dilemma is, the builders have only gave us 24 hours to make our decision. We need to tell them tomorrow afternoon.

Your daughter doesn't start school for 2 years. No need to be panicking yet.

Also, do you intend to move again when she goes up to Junior school and again when she goes to senior?

cmccar15

No. This would be a house for life.

Similar houses to ours in our estate have been
for sale for about a year and a half and haven't sold. That's why whew we had the opportunity of part exchange that took that problem out of the equation.

bunny2548

this is quie a hard one, the only problem is, you dont know whats is around the corner, if you take it circs might change and you could be in trouble, then again you might win the lotto!

if it was me i would go for it, only because i have recently moved house and it had been a nightmare for the first 6 months, ( morgtage people messing around then deccorators and carpet fitters( who im now taking to court)) but it is our home for life, great schools and amazing area (family close by aswell) and it has skinted us slightly, but not so much that we physicly couldnt afford to live. the first 6 months were hell and me and my OH nearly split up, but saying that it was the best thing ive ever done, the kids are happy with their new schol (grades are rising) the OH is so happy with the quiteness of the area (used to live on a main road) and im the happiest ive been since the kids were born if you love where you live it reflects in your everyday life!!
Go for it !! xx

ruggedtoast

No one on here can answer your question because we have no idea what your finances are.

Your question is one of arithmetic, you need to sit down with Excel and go through what your income vs outgoings are with the new mortgage and figure out whether you can afford it.

It's all well and good saying ; oh we'll just live on beans and toast for 104 weeks and it'll all be fine, haha; but if you literally are going to have to do that just to break even you can't afford it. What will you do when your car breaks down, or another unexpected expense comes along?

Interest rates may well be higher than they are now by a considerable way, your mortgage could cost more when you come off the fix than it does now. Can you afford that?