New build mortgage

littlesparkles

I am in the process of buying a new build house. I've been told by a broker that Nationwide and Santander are pretty much the only ones who will do a mortgage for us. We have 15% deposit and the builder is giving another 5% as well as paying stamp duty and legal fees. Would any other lenders be available to us?

kingstreet

Presumably you mean the builder is giving you another 5%?

Can you tell us why the broker thinks only Nationwide and Santander will lend to you?

Based on the information you've given, there are more lenders doing 80% on newbuild houses than just those two.

If it's the 5% plus the stamp duty plus the legal fees, that's as likely to be a problem for the lenders you've mentioned as any others, as lenders generally don't like incentives to exceed 5%.

littlesparkles

Yes I mean builder. Oops! I've changed it in the original post. The broker seems to think only those two lenders will look at our deal due to the incentives. I've tried looking on lenders' websites for new build info but this is hard to find and I will need a good few hours to phone them all. Is there info about which lenders will look at new build applications with 15% buyer deposit plus 5% builder deposit? And the other incentives?

kingstreet

A similar thread from a few days ago;-

https://forums.moneysavingexpert.com/discussion/4055863

and I don't think it's as big an issue as your broker appears to be making it.

HSBC probably has some of the best products in the market, but don't sell via brokers. I suggest you contact them and see what their stance might be...

littlesparkles

HSBC take all of the incentives off of the value so it's a no-go with that bank.

littlesparkles

We have quite a lot of incentives as it was part of the deal that we reduced our price on the current property to sell more quickly. In return the builder is paying for 5% deposit, stamp duty, legal fees estate agent & removal. I didn't realise the lenders would view these do negatively - they were mainly to compensate us for reducing our price on the current property!

jackyann

Take a look at: http://www.selfbuild.com, finance / mortgage section.
If you go to the Home Building & Renovating Show: http://www.homebuildingshow.co.uk (contact them for free tickets) you get advice about lots of things, including mortgages.
Good Luck!

OOPS! I've added this because I think maybe you are buying a house built by a builder, not doing a self build; but I've left it in case I'm mistaken, or someone else interested in self build sees it.

Thrugelmir

littlesparkles wrote: »

I didn't realise the lenders would view these do negatively

It all amounts to a cash rebate.

Builders do transactions this way to hide the true selling price of the property when filed on land registry.

DVardysShadow

littlesparkles wrote: »

HSBC take all of the incentives off of the value so it's a no-go with that bank.

At 15% deposit in your own right, you are in with a good chance I would say. It is not so much the incentives which might rule you out as how the deal would look after the incentives are taken out.

harvey115

DVardysShadow wrote: »

At 15% deposit in your own right, you are in with a good chance I would say. It is not so much the incentives which might rule you out as how the deal would look after the incentives are taken out.

As mentioned above.

If the lender does not like the incentives, they would subtract it out of the value of the house. This would move your LTV here or there but does not have any other issues other then that.

You need to make sure that if the incentives are taken off the house value, can you increase or decrease your deposit to allow for the deal to go forward?

FEvans

I am in the same boat and can confirm that with a 15% deposit there are a lot of lenders happy to do a new build.

The yorkshire BS had the best deal that i could find on a 85% LTV on a new build. (i discounted HSBC in light of their customer service)